Holding

The State of Goa must grant fresh mining leases, not second renewals, and the High Court's order directing renewals is set aside.

Summary

The Supreme Court examined the State of Goa's grant of second renewals of mining leases after illegal mining was uncovered. It held that the earlier *Goa Foundation* judgment required the State to grant fresh mining leases, not renewals, and that the High Court erred in directing execution of lease deeds under Section 8(3). The Court also found that the Ministry of Environment and Forests could not merely lift the abeyance order without fresh environmental clearances. While competitive bidding (auction) is a preferred method for allocating natural resources, it is not constitutionally mandatory. Consequently, the second renewals were quashed, the High Court's order set aside, and the State was directed to grant fresh leases and obtain fresh clearances. The petitioners were allowed to continue mining only until a specified date, after which operations must cease pending fresh grants.

Issues considered

The State of Goa's authority to grant second renewals of mining leases contrary to the *Goa Foundation* decision requiring fresh leases.
Whether a renewal of a mining lease is legally equivalent to a fresh grant under the MMDR Act.
The applicability of Section 8(3) of the Mines and Minerals (Development and Regulation) Act, 1957 to the second renewals.
Whether the State must allocate mining leases through competitive bidding or auction.
The validity of the Ministry of Environment and Forests' lifting of the abeyance order without fresh environmental clearances.
The correctness of the Bombay High Court's direction to execute lease deeds under Section 8(3).
The constitutional constraints under Articles 14 and 39(b) on the State's policy decision not to auction.
The requirement of fresh environmental clearances for mining leases under EIA 1994 and EIA 2006.

Legislation cited

Subjects

mining leasesrenewalfresh leaseauctionnatural resource allocationenvironmental clearanceArticle 14Article 39(b)judicial reviewMines and Minerals ActGoa mining case

Judgment

[2018] 2 S.C.R. 361 361

THE GOA FOUNDATION A
v.
M/S SESA STERLITE LTD. & ORS.
(SLP (Civil) No. 32138 of 2015)
FEBRUARY 7, 2018 B
[MADAN B. LOKUR AND DEEPAK GUPTA, JJ.]
Mines and Minerals:
Mining leases – Renewal of – Propriety – Appointment of
Commission of Inquiry, pursuant to information regarding large- C
scale illegal mining in contravention of provisions of relevant
laws – After the report of the Commission, Govt. of Goa by order
dated 10.9.2012 suspended all the mining operations in the State –
Ministry of Environment and Forest (MoEF) kept in abeyance the
environmental clearances in the State of Goa by order dated
D
14.9.2012 – PIL was filed by Goa Foundation in Supreme Court
seeking directions to Governments of Union and State of Goa to
take steps to terminate the mining leases where mining was carried
out in violation of various statutes – Writ petitions by mining lease-
holders before High Court seeking quashing of the orders dated
10.9.2012 and 14.9.2012, were transferred to Supreme Court – E
Supreme Court in *Goa Foundation case held that orders dated
10.9.2012 and 14.9.2012 were not liable to be quashed and would
continue till decisions are taken to grant fresh leases and fresh
environmental clearances for mining projects – Other writ petitions
were filed before High Court by several mining lease-holders for
F
consideration of their applications for second renewal of mining
leases – High Court held that the decision in *Goa Foundation case
was not an impediment in considering the applications for second
renewal; and that renewal of a lease is also a fresh grant – High
Court directed the State to execute the lease deeds u/s. 8(3) of MMDR
Act in favour of the lease-holders who have already paid the stamp G
duty in accordance with Mineral Policy 2013 – Further directed
the State to decide the renewal applications u/s. 8(3), of those who
had not paid the stamp duty – State of Goa thereafter formulated
Goa Grant of Mining Leases Policy 2014 – Central Government
prepared draft of Mines and Minerals (Development and Regulation)
H
361
362 SUPREME COURT REPORTS [2018] 2 S.C.R.

A Act, 2014 (amended Act) and uploaded the same on the website –
The proposed amendment inter alia by introducing s. 10B provided
for competitive bidding – Soon thereafter and till the date of
promulgation of Amendment Ordinance, State of Goa granted
second renewals to several mining lease-holders – Thereafter, the
State requested MoEF to lift the abeyance order (dated 14.9.2012)
B
on environmental clearances – Consequently MoEF by orders dated
20.3.2015 lifted the abeyance order in respect of 72 cases out of
139 – Held: The decision of State of Goa to grant second renewal
of mining leases was erroneous and contrary to decision in *Goa
Foundation case – State was obliged to grant fresh mining leases as
C declaration in *Goa Foundation case was explicitly to grant fresh
leases – Grant of fresh lease is not the same as renewal of lease –
State was not under any constitutional obligation to grant fresh
mining leases through process of competitive bidding or auction –
However, the second renewals were unduly hasty, without taking
into consideration all relevant material and ignoring relevant
D
material, was not in the interest of mineral development – The
decision of renewal was only to augment the revenues of the State
which is outside the purview of s. 8(3) of 1957 Act – Therefore, the
second renewal granted by the State is liable to be set aside – MoEF
was obliged to grant fresh environmental clearance in respect of
E fresh grant of mining leases in accordance with law and decision in
*Goa Foundation case and not by merely lifting the abeyance order
dated 14.9.2012 – High Court proceeded on the erroneous basis
that it could direct the State to grant second renewal notwithstanding
the direction in *Goa Foundation case – Mines and Minerals
(Development and Regulations) Act, 1957 – s.8(3) – Forest
F
(Conservation) Act, 1980 – Environment (Protection) Act, 1986.
Auction:
Natural Resource allocation – Through auction method –
Whether mandatory – Held: There is no constitutional or otherwise
G mandate for allocation of natural resources (other than spectrum)
through auction method – But, auction process should not be given
a go-bye without any justification – The decision to give a go-bye
is judicially reviewable and would attract Art. 14 – Review is
permissible only when the allocation is for commercial pursuits of
profit de hors any social or welfare purpose – It will not be permissible
H
THE GOA FOUNDATION v. M/S SESA STERLITE LTD. & ORS. 363

if such allocation is for a social or welfare purpose – Judicial A
Review – Constitution of India – Art. 14.
Judicial Review:
Judicial review of policy decision – In respect of disposal of
natural resources – Scope of – Held: Judicial review of a policy is
kept open if it does not serve the common good as understood in B
Art. 39(b) and if violates Art. 14 – However, the courts must be very
cautious and circumspect in diluting or setting aside a policy and
must do so only if it is constitutionally unavoidable – Constitution
of India – Arts. 14 and 39(b) – Administrative Law.
Lease: C

Renewal of lease vis-a-vis grant of fresh lease – Held: Grant
of a fresh lease is not the same as the renewal of a lease – Therefore,
renewal cannot be called amounting to grant of fresh lease.
Environmental Law: D
The issues having impact on the environment and the people
of a community or a region or the State are required to be looked at
holistically – One or two violations may be wished away as
inconsequential, but multiple violations by several persons can result
in serious problems.
E
Disposing of the petitions, the Court
HELD: 1.1 The decision of the State of Goa to grant a second
renewal of the mining leases is erroneous, contrary to the decision
in *Goa Foundation case and must be and is quashed. In *Goa
Foundation case the Court was quite obviously aware that it was F
concerned, inter alia, with the second renewal of mining leases
and yet it chose to recount the factual situation, make a declaration
and pass a direction without adverting to the possibility of a second
renewal of a mining lease. The Court was also conscious that the
mining lease holders had carried out indiscriminate and illegal
mining for about five years (from November 2007 to September G
2012) and had made profits out of the illegal mining. The sequence
of events from September 2012 onwards, the appointment of a
Monitoring Committee to dispose of the illegally mined ore, the
declaration and direction unmistakably point to the intention of
the Court to end the sordid chapter of illegal mining by the lease H
364 SUPREME COURT REPORTS [2018] 2 S.C.R.

A holders and start on a clean slate. Viewed in this perspective, the
Court really did intend the State of Goa to consider the grant of
fresh leases in accordance with law. [Paras 41, 58] [395-B-D; 400-
F-G]
1.2 The declaration of the Court in *Goa Foundation case
B in paragraph 87.5 of Report is also quite clear, namely, “It is for
the State Government to decide as a matter of policy in what
manner mining leases are to be granted in future….” The
declaration was explicit and related to the grant of mining leases
and not a second renewal. Similarly, the direction given in
paragraph 88.4 of the Report that “The State Government may
C grant mining leases of iron ore and other ores in Goa in
accordance with its policy decision…..” was equally explicit and
related to the grant of mining leases and not a second renewal.
[Paras 42, 43] [395-E-F]
1.3 From a reading of the decision rendered by the High
D Court in the present petition, it is evident that the State of Goa
understood the decision of this Court in *Goa Foundation case
to mean that fresh mining leases were required to be granted on
the basis of a policy yet to be framed by the State of Goa and the
issue of second renewals did not survive consideration. The High
E Court noted that this Court was alive to the fact that the State of
Goa had granted in-principle second renewal to 28 mining leases
and had collected renewal fees or stamp duty from 27 mining
leases (presumably out of the 28 mining leases). Notwithstanding
the in-principle grant of second renewal of 28 mining leases and
collection of renewal fees or stamp duty, this Court in *Goa
F Foundation case consciously required the State of Goa to grant
fresh leases. What is equally significant is that the State of Goa
also understood the decision of the Court in the same manner
and intended to act on that basis. [Paras 46-48] [396-D-E, 397-C-
E, F-G]
G 1.4 While this Court had required the State of Goa to grant
fresh mining leases and the State of Goa was willing to comply
with this direction, the High Court instead directed it to execute
mining leases under Section 8(3) of the MMDR Act in respect of
those who had paid the renewal fees or stamp duty. The High
H Court also directed the State of Goa to decide their pending
THE GOA FOUNDATION v. M/S SESA STERLITE LTD. & ORS. 365

second renewal applications within a period of three months A
keeping in mind the provisions of Section 8(3) of the MMDR Act
(presumably after paying the renewal fees or stamp duty in terms
of the Government order of 21 st February, 2013). The
understanding by the High Court of the decision of this Court in
*Goa Foundation case is totally incorrect. [Para 49] [398-A-C]
B
1.5 It appears from the contents of the Grant of Mining
Leases Policy that in view of the decision of this Court in *Goa
Foundation case, the State was actively considering a policy for
granting fresh mining leases by considering several factors.
However, the decision and directions of the High Court
supervened leaving no choice, according to the State, but to C
completely abandon the process of grant of fresh mining leases
through the process of competitive bidding for earning revenue
and justify the abandonment. [Para 50] [398-D]
1.6 There is no doubt that the renewal of a lease is virtually
the same as the grant of a fresh lease but a converse direction to D
grant a mining lease cannot be understood to mean granting a
renewal of a mining lease. Obviously, the grant of a fresh lease is
not the same as the renewal of a lease and when the Court in
*Goa Foundation case required the State of Goa to grant a fresh
lease, it did not require the State to renew the existing (expired) E
lease. The Court could have explicitly declared and directed the
State of Goa to grant a second renewal of the mining leases rather
than to say it in a roundabout manner that it should do so by
granting a fresh lease equivalent to a renewal. Therefore, it cannot
be said that the renewal of a mining lease is equivalent to or
amounts to the grant of a fresh lease. [Paras 52, 55] [399-F-G; F
400-A]
Common Cause v. Union of India (2014) 14 SCC 155 :
[2014] 7 SCR 561 – distinguished.
Delhi Development Authority v. Durga Chand Kaushish G
(1973) 2 SCC 825 : [1974] 1 SCR 535; Provash
Chandra Dalui v. Biswanath Banerjee (1989) Supp 1
SCC 487 : [1989] 2 SCR 401; M.C. Mehta v. Union of
India (2004) 12 SCC 118 : [2004] 3 SCR128; State of
West Bengal v. Calcutta Mineral Supply Company
Private Limited (2015) 8 SCC 655 : [2015] 9 SCR 230; H
366 SUPREME COURT REPORTS [2018] 2 S.C.R.

A Gajraj Singh v. State Transport Appellate Tribunal (1997)
1 SCC 650 : [1996] 6 Suppl. SCR 172 – referred to.
2.1 There is no constitutional requirement (let alone a
mandate) for allocation of natural resources through the auction
method (other than spectrum) but at the same time the auction
B process should not be given a go-bye without any justification –
the decision to give a go-bye is judicially reviewable though the
scope of judicial review might be rather restricted. [Para 69] [406-
C-D]
2.2 Consequently, while there is no mandate, constitutional
C or otherwise, that natural resource allocation must be only by
auction, it is certainly “a more preferable method”. There are
exceptions, such as when the natural resource allocation is for a
“social or welfare purpose”. On the other hand if the natural
resource allocation is “for commercial pursuits of profit
maximising private entrepreneurs” de hors any social or welfare
D purpose, then judicial review would be permissible and Article
14 of the Constitution would be attracted and if the executive
action is found to be arbitrary, it would be struck down. Therefore,
when it comes to natural resource allocation, the executive has a
somewhat limited elbow room. [Para 69] [406-E-F]
E 3.1 Judicial review of a policy is kept open if it does not
serve the common good as understood in Article 39(b) of the
Constitution, if it violates Article 14 of the Constitution and
alienates natural resources for maximizing profits of private
entrepreneurs while sidelining Article 39(b) of the Constitution.
F “The legislature and the executive are answerable to the
Constitution and it is there where the judiciary, the guardian of
the Constitution, must find the contours to the powers of disposal
of natural resources, especially Article 14 and Article 39(b) [of
the Constitution]. [Para 74] [410-G; 411-A]

G 3.2 Notwithstanding this, a Court must exercise restraint
and not set aside Government policy only because it disagrees
with it or because a better policy could be framed or simply
because it has the power to set aside the policy. Policies framed
by the State, after due consideration, must be respected and given
enough elbow room and flexibility for implementation. Of course,
H there would be occasions when the implementation of a policy
THE GOA FOUNDATION v. M/S SESA STERLITE LTD. & ORS. 367

has teething problems or some lacuna is discovered at a slightly A
later stage, but that does not mean that policy itself is defective.
Therefore, Courts must be very cautious and circumspect in
diluting or setting aside a policy and must do so only if it is
constitutionally unavoidable, otherwise good governance could
be a casualty. [Paras 75] [411-B-C]
B
3.3 There is no doubt that iron ore mining in Goa was solely
for commercial purposes. The State sacrificed maximizing revenue
for no apparent positive reason, virtually surrendering itself to
the commercial and profit making motives of private
entrepreneurs and ignoring the interests of Goan society in
general. Therefore, in principle, the decision of the State of Goa C
to not auction the grant of mining leases was flawed in that it did
not serve the common or public or social good but primarily
assisted in filling the coffers of private entrepreneurs. [Para 93]
[419-D, F]
Sandur Manganese and Iron Ores Limited v. State of D
Karnataka (2010) 13 SCC 1 : [2010] 11 SCR 240 –
distinguished.
4.1 In renewing the mining leases, the State of Goa
completely ignored several relevant and important and significant
factors giving the impression that the renewals were not quite E
fair or reasonable. The State ignored the fact that every single
mining lease holder had committed some illegality or the other
in varying degrees. To identify these illegalities (although they
had already been identified by the Justice Shah Commission and
by the EAC), a Special Investigation Team had been set up as
F
also a team of Chartered Accountants. Instead of waiting for a
report from any one of these teams, the State acted in violation of
the Grant of Mining Leases Policy and renewed the mining leases.
[Paras 104-105] [423-F-H]
4.2 The undue haste in which the State acted gives the
G
impression that it was willing to sacrifice the rule of law for the
benefit of the mining lease holders and the explanation of
satisfying the needs of some sections of society for their livelihood.
The undue haste also needs to be looked at in the context that
the Grant of Mining Lease Policy was an in-principle decision
and was to be notified after it was vetted for legal requirements H
368 SUPREME COURT REPORTS [2018] 2 S.C.R.

A “from specific necessities as also from financial view points”. In
other words, the Grant of Mining Leases Policy as published on
4th November, 2014 was not a final policy statement but only an
intent that would take final shape after due vetting. The Grant of
Mining Leases Policy was eventually published on 20th January,
2015 but it was acted upon even before it was gazetted. [Paras
B
106, 107] [424-E-F; 428-G-H]
4.3 An Ordinance to amend the MMDR Act was made
known to the general public on 5th January, 2015 and promulgated
by the President on 12 th January, 2015 thereby mandating
competitive bidding or auction for the grant of mining leases.
C The State of Goa perhaps anticipated this in view of the publication
of the draft Mines and Minerals (Development and Regulation)
Act, 2014 and therefore hurried into the second renewal of mining
leases (notwithstanding the Grant of Mining Leases Policy) to
defeat the introduction of the auction process. [Para 109] [425-
D E-F]
4.4 The National Mineral Policy, 2008 clearly suggests that
for a period of five years between 2006 and 2012 the mining lease
holders committed various illegalities and irregularities in the
mining process. Irreparable damage was being caused by the
E mining lease holders without any benefit to the domestic industry.
Therefore, while the mining lease holders may have contributed
virtually nothing to the domestic industry, they might have made
considerable profits through exports and might have also
benefited the foreign exchange reserves of the country, but the
real-time damage to the quality of health and life of the average
F Goan and damage to the environment and ecology of Goa is
nevertheless incalculable or at least considerable – and export
benefits cannot be weighed against health or the environment.
[Para 113] [427-C-E]
4.5 There was no social or public purpose attached to the
G mining operations. There was one and only one objective behind
the mining activity and that was profit maximization. The renewal
of the mining leases would give considerable profits to the mining
lease holders well beyond the benefits that could accrue to the
State or to the average resident of Goa. It was not kept in mind
H that the material resources of the country should not be dissipated
THE GOA FOUNDATION v. M/S SESA STERLITE LTD. & ORS. 369

free of cost or at a consideration lower than their actual worth, A
and mining leases were renewed for a small payment of stamp
duty and royalty. It is therefore clear that the considerations that
weighed with the State were not for the people of Goa but were
for the mining lease holders. This certainly cannot be described
as being “in the interests of mineral development.”[Para 114]
B
[427-F-H]
Special Reference No. 1 – Natural Resources Allocation
(2012) 10 SCC 1 : [2012] 9 SCR 311 – relied on.
4.6 In this background, there is little to suggest that the
State considered the requirements of Section 8(3) of the MMDR C
Act in that the interests of mineral development was secondary
while granting the second renewal of mining leases. The entire
exercise undertaken by the State was a hasty charade, regardless
of violations of the law by the mining lease holders, without any
benefit to the Indian industry and without any concern for the
health of the average Goan. [Para 116] [428-C] D

4.7 It is informed that of the 88 mining leases that were
renewed, 38 of them are not working for a variety of reasons –
making their renewal an empty exercise. This also shows the
undue haste shown by the State of Goa in granting a second
renewal to the mining leases. [Paras 121, 122] [430-A-B] E

4.8 It is possible that the State did have some serious
governance issues to contend with as mentioned in the Grant of
Mining Leases Policy. Nevertheless the State is bound by the
law, however uncomfortable it might be in granting a second
renewal in terms of Section 8(3) of the MMDR Act. Therefore, F
on an overall consideration of all aspects of the case, the decision
of the State of Goa to quickly renew the mining leases while
ostensibly complying with the requirements of Section 8(3) of
the MMDR Act and thereby jettisoning the rule of law was
unjustified. [Paras 123, 124] [430-D-E, H; 431-A-B] G
4.9 Thus, the second renewal of the mining leases granted
by the State of Goa was unduly hasty, without taking all relevant
material into consideration and ignoring available relevant
material and therefore not in the interests of mineral development.
The decision was taken only to augment the revenues of the State
H
370 SUPREME COURT REPORTS [2018] 2 S.C.R.

A which is outside the purview of Section 8(3) of the MMDR Act.
The second renewal of the mining leases granted by the State of
Goa is liable to be set aside and is quashed. [Para 149] [440-B-C]
5.1 The Ministry of Environment and Forest (MoEF) was
obliged to grant fresh environmental clearances in respect of fresh
B grant of mining leases in accordance with law and the decision of
this Court in *Goa Foundation case and not merely lift the
abeyance order of 14th September, 2012. [Para 149] [440-D]
*Goa Foundation v. Union of India (2014) 6 SCC 590 :
[2014] 5 SCR 302; Goa Foundation v. Union of India
C (2014) 6 SCC 738; State of M.P. v. Krishnadas Tikaram
1995 Supp (1) SCC 587 : [1994] 3 Suppl. SCR 747 –
relied on.
Centre for Public Interest Litigation v. Union of India
(2012) 3 SCC 1: [2012] 3 SCR 147; Manohar Lal
Sharma v. Principal Secretary (2014) 9 SCC 516 :
D
[2014] 8 SCR 446; M/s. Ajar Enterprises Private
Limited v. Satyanarayan Somani 2017 (10) SCALE 346;
Tata Iron & Steel Co. Ltd. v. Union of India (1996) 9
SCC 709 : [1996] 3 Suppl. SCR 808; Property Owners’
Association v. State of Maharashtra (2013) 7 SCC 522 –
E referred to.
5.2 The MoEF acted without any application of mind in
lifting the order placing all the environmental clearances in
abeyance. Since the entire exercise carried out by the MoEF on
20th March, 2015 was mechanical, at the behest of the State of
F Goa, without due application of mind, without considering the
multiple illegalities and irregularities committed by the mining
lease holders or passing on the buck to the State of Goa and
without considering relevant material such as the report of the
EAC and the Expert Committee appointed by this Court, the
exercise of lifting the abeyance order on 20th March, 2015 by the
G MoEF must be held void and as directed by the Court in Goa
Foundation case all the mining lease holders must obtain fresh
environmental clearance for their mining project. [Para 136] [435-
C-E]
5.3 Issues impacting society are required to be looked at
H holistically and not in a disaggregated manner. An overall
THE GOA FOUNDATION v. M/S SESA STERLITE LTD. & ORS. 371

perspective is necessary on such issues including issues that A
have impact on the environment and the people of a community
or a region or the State. One or two violations here and there
may be wished away as inconsequential, but multiple violations
by several persons can result in serious problems. Therefore,
the Mineral Policy, the Grant of Mining Leases Policy, the
B
amendment to the MMDR Act, the report of the EAC and the
report of the Expert Committee must be considered in the larger
context of constitutionalism, the rule of law, environmental
jurisprudence as well as the fundamental right of the people of
Goa to have clean air and protection of the fragile ecology.
Governance cannot and should not be carried out de hors the C
interests of the people and some uncomfortable decisions may
be inevitable for balancing the equities. [Para 138] [436-B-E]
5.4 It is not correct to say that if environmental clearance
is granted and mining operations commence within the five year
period, then the environmental clearance under EIA 1994 is valid D
till the project or the mining lease period is over. Such a view
overlooks the decisions in # M. C. Mehta case and ## Common
Cause case which accept the view that the validity of an
environmental clearance granted under EIA 1994 is only five years
as also the view that a valid environmental clearance is necessary
for the renewal of a mining lease. No notification of the MoEF E
can overrule decisions of this Court. As far as EIA 2006 is
concerned, this provides that the environmental clearance would
be valid for the estimated project life subject to a maximum of 30
years. [Para 145] [438-E-G]
# M.C. Mehta v. Union of India (2004) 12 SCC 118 : F
[2004] 3 SCR 128;
## Common Cause v. Union of India (2017) 9 SCC 499
– referred to.
5.5 The renewal of a lease, whether under the provisions
of the Forest (Conservation) Act, 1980 or otherwise cannot be G
granted without the lease holder complying with the necessary
statutory requirements particularly since the grant of renewal is
a fresh grant and must be consistent with law. [Para 132] [433-G;
434-A]
Ambica Quarry Works v. State of Gujarat (1987) 1 SCC H
372 SUPREME COURT REPORTS [2018] 2 S.C.R.

A 213 : [1987] 1 SCR 562; Rural Litigation and
Entitlement Kendra v. State of U.P. (1989) Supp 1 SCC
504 : [1988] 2 Suppl. SCR 690; State of M.P. v.
Krishnadas Tikaram (1995) Supp 1 SCC 587 : [1994]
3 Suppl. SCR 747 – relied on.
B 6. The High Court proceeded on the erroneous basis that
it could direct the State of Goa to grant a second renewal of the
mining leases notwithstanding the direction in *Goa Foundation
case. [Para 148] [439-F]
S. N. Mohanty v. Union of India 2012 SCC OnLine
C Del 4000 – distinguished.
Case Law Reference
[2014] 5 SCR 302 relied on Para 8
(2014) 6 SCC 738 relied on Para 18

D [1974] 1 SCR 535 referred to Para 52
[1989] 2 SCR 401 referred to Para 53
[2004] 3 SCR128 referred to Para 53, 131
[2015] 9 SCR 230 referred to Para 54
[1996] 6 Suppl. SCR 172 referred to Para 54
E
[2014] 7 SCR 561 distinguished Para 57
[2012] 3 SCR 147 referred to Para 60
[2014] 8 SCR 446 referred to Para 61
[2012] 9 SCR 311 relied on Para 61
F 2017 (10) SCALE 346 referred to Para 73
[2010] 11 SCR 240 distinguished Para 95
[1996] 3 Suppl. SCR 808 referred to Para 111
(2017) 9 SCC 499 referred to Para 131
G [1987] 1 SCR 562 relied on Para 132
[1988] 2 Suppl. SCR 690 relied on Para 132
[1994] 3 Suppl. SCR 747 relied on Para 132
2012 SCC OnLine Del 4000 referred to Para 146
H (2013) 7 SCC 522 referred to Para 147
THE GOA FOUNDATION v. M/S SESA STERLITE LTD. & ORS. 373

CIVIL APPELLATE JURISDICTION : Special Leave Petition A
(Civil) No. 32138 of 2015.
From the Judgment and Order dated 13.08.2014 of the High Court
of Judicature at Bombay, Panji Bench at Goa in WP No. 293 of 2014
WITH
SLP (C) No. 32699-32727 of 2015. B
W. P. (C) Nos.711 and 720 of 2015.
Atmaram N.S. Nadkarni, ASG, Chander Uday Singh, Darius
Khambata, Mukul Rohtagi, Huzefa Ahmadi, Sr. Advs., Prashant Bhushan,
Pranav Sachdeva, O. Kuttan, Ms. Neha Rathi, Sanjay Parikh, Ms. Anitha
Shenoy, Ms. Mamta Saxena, Ms. Srishti Agnihotri, Pranav Sachdeva, C
Ms. Neha Rathi, Rohit Kumar Singh, Merusagar Samantaray, Salvador
S. Rebello, Ms. Viddushi, Ms. Lhinghneviah, Ms. Sneha S. Prabhu
Tendulkar, Ms. Nivedita Nair, Abhishek Bhardwaj, Divya Prakash Pandey,
Devashish Bharuka, Ms. Rukmani Bobde, G.S. Makker, Pratap
Venugopal, Ms. Surekha Raman, Naval Aggarwal, Anuj Sarma,
Ms. Niharika, Aman Shukla, Ms. Kanika Kalaiyarasan (for M/S. K J D
John And Co.), Sumit Goel, Tanuj Agarwal (for M/s. Parekh & Co.),
Yashraj Singh Deora, Ms. Swati Kamat, Ms. Parag Rao, Ms. Asmita
Singh, Ms. Sanjana Saddy, Ms. Ragya V. Singh, Ninad Laud, Ivo D’Costa,
Jayant Mohan, Abhijit Gosavi, Rohan Sharma, Karan Mathur, Anjuman
Tripathy, Sumit Goel, Tanuj Agarwal (for M/s. Parekh & Co.), Yashraj E
Singh Deora, Ms. Swati Kamat, Ms. Asmita Singh, Ms. Sanjana Saddy,
Ms. Ragya V. Singh, Nikhil Vaze, Ms. Sujata Kurdukar, Rudresh Desai,
Jayant Mohan, P. Chaitanyashil, Advs. for the appearing parties.
The Judgment of the Court was delivered by
MADAN B. LOKUR, J. 1. Rapacious and rampant exploitation F
of our natural resources is the hallmark of our iron ore mining sector -
coupled with a total lack of concern for the environment and the health
and well-being of the denizens in the vicinity of the mines. The sole
motive of mining lease holders seems to be to make profits (no matter
how) and the attitude seems to be that if the rule of law is required to be G
put on the backburner, so be it. Unfortunately, the State is unable to
firmly stop violations of the law and other illegalities, perhaps with a
view to maximize revenue, but without appreciating the long term impact
of this indifference. Another excuse generally put forth by the State is
that of development, conveniently forgetting that development must be
sustainable and equitable development and not otherwise. H
374 SUPREME COURT REPORTS [2018] 2 S.C.R.

A 2. Effective implementation and in some instances circumvention
of the mining and environment related laws is a tragedy in itself. Laxity
and sheer apathy to the rule of law gives mining lease holders a field
day, being the primary beneficiaries, with the State being left with some
crumbs in the form of royalty. For the State to generate adequate revenue
through the mining sector and yet have sustainable and equitable
B
development, the implementation machinery needs a tremendous amount
of strengthening while the law enforcement machinery needs strict
vigilance. Unless the two marry, we will continue to be mute witnesses
to the plunder of our natural resources and left wondering how to retrieve
an irretrievable situation.
C 3. The Government of India appears to have received information
of large-scale illegal mining of iron ore and manganese ore in different
States in contravention of the provisions of the Mines and Minerals
(Development and Regulation) Act, 1957 (the MMDR Act), the Forest
(Conservation) Act, 1980, the Environment (Protection) Act, 1986 and
D other rules and guidelines issued on the subject from time to time.
4. Acting on this information, the Government of India appointed
Justice M.B. Shah a former judge of this Court as a commission of
inquiry under Section 3 of the Commissions of Inquiry Act, 1952 by a
notification dated 22nd November, 2010. The terms of reference of the
E Commission for the State of Goa were as follows:
2. The terms of reference of the Commission shall be -
(i) to inquire into and determine the nature and extent of mining
and trade and transportation, done illegally or without lawful
authority, of iron ore and manganese ore, and the losses
F therefrom; and to identify, as far as possible, the persons, firms,
companies and others that are engaged in such mining, trade
and transportation of iron ore and manganese ore, done illegally
or without lawful authority;
(ii) to inquire into and determine the extent to which the
G management, regulatory and monitoring systems have failed
to deter, prevent, detect and punish offences relating to mining,
storage, transportation, trade and export of such ore, done
illegally or without lawful authority, and the persons responsible
for the same;
H
THE GOA FOUNDATION v. M/S SESA STERLITE LTD. & ORS. 375
[MADAN B. LOKUR, J.]

(iii) to inquire into the tampering of official records, including A
records relating to land and boundaries, to facilitate illegal mining
and identify, as far as possible, the persons responsible for
such tampering; and
(iv) to inquire into the overall impact of such mining, trade,
transportation and export, done illegally or without lawful B
authority, in terms of destruction of forest wealth, damage to
the environment, prejudice to the livelihood and other rights of
tribal people, forest dwellers and other persons in the mined
areas, and the financial losses caused to the Central and State
Governments.
C
3. The Commission shall also recommend remedial measures
to prevent such mining, trade, transportation and export done
illegally or without lawful authority.”
5. Justice Shah visited Goa and after calling for and receiving
information from the concerned authorities as well as the mining lease D
holders, he submitted a report on 15th March, 2012 and another on 25th
April, 2012 to the Ministry of Mines in the Government of India. The
reports were tabled in Parliament on 7th September, 2012 along with an
Action Taken Report and as a result, the Government of Goa passed an
order dated 10th September, 2012 suspending all mining operations in the
State with effect from 11th September, 2012. The Ministry of Environment E
and Forests (MoEF) of the Government of India acted similarly and
kept in abeyance the environmental clearances granted to 139 mines
(actually 137 mines – there is some duplication) in the State of Goa by
an order dated 14th September, 2012.
6. Subsequent to the reports given by Justice Shah, a writ petition F
was filed by Goa Foundation in this Court being WP (C) No. 435 of
2012. The writ petition was a public interest litigation praying, inter alia,
for directions to the Union of India and the State of Goa to take steps to
terminate the mining leases where mining was carried out in violation of
various statutes. G
7. Similarly, several mining lease holders preferred writ petitions
in the Bombay High Court for a declaration that the reports given by
Justice Shah are illegal and also for quashing the orders dated 10 th
September, 2012 and 14th September, 2012 whereby mining operations
were suspended and environmental clearances were kept in abeyance.
H
376 SUPREME COURT REPORTS [2018] 2 S.C.R.

A The writ petitions filed in the High Court were transferred to this Court
for hearing along with WP (C) No. 435 of 2012.
8. This Court heard all these matters and rendered its decision in
Goa Foundation v. Union of India on 21st April 2014.1 Among other
conclusions arrived at, it was held by the Court that all the iron ore and
B manganese ore leases had expired on 22 nd November, 2007.
Consequently, any mining operation carried out by the mining lease holders
after that date was illegal. It was also held that all the mining lease
holders had enjoyed a first deemed renewal of the mining lease and for
a second renewal an express order was required to be passed in view of
and in terms of Section 8(3) of the MMDR Act. For a second renewal
C of the mining lease, it was held that the State Government must apply its
mind and record reasons for renewal being in the interest of mineral
development and the necessity to renew the mining lease. Any decision
taken by the State Government should also be in conformity with the
constitutional provisions. The decision taken by the State of Goa to grant
D a mining lease in a particular manner or to a particular party could be
examined by way of judicial review. It was also held that the orders
dated 10th September, 2012 and 14th September, 2012 are not liable to be
quashed and that they would continue till decisions are taken to grant
fresh leases and fresh environmental clearances for mining projects.
E Goa Mineral Policy 2013
9. During the pendency of the proceedings before the Court, the
State of Goa announced the draft Goa Mineral Policy on 21st August,
2012. After suggestions etc. were received, the Mineral Policy was
finalized and gazetted on 28th September, 2013.
F 10. A few salient features of the Mineral Policy may be mentioned.
It is stated in the Preamble to the Mineral Policy: “The Goan economy
is heavily dependent on the iron ore industry insofar as the major share
of the regional income from the mineral industry and its allied activities
like transport and trade is concerned.”
G “However, during the period from 2006-07 to 2011-12, due to
huge spurt in demand of low grade ore in international market
followed by illegalities and irregularities in the previous
regulatory regime, the State has witnessed the peak of chaotic
and unregulated mining without any concern for fragile ecology
1
H (2014) 6 SCC 590
THE GOA FOUNDATION v. M/S SESA STERLITE LTD. & ORS. 377
[MADAN B. LOKUR, J.]

and environment of the State or for the general well being of an A
average Goan. It has resulted in massive export of unaccounted
ore from unidentified sources like dumps and tailings. The
reckless exploitation without any concern for sustainability
that the State has witnessed in last five years has serious
implications. Minerals are a finite and non-renewable natural
B
resource and must be exploited wisely in the larger interest of
the State.
It is high time that the new Government that has received an
unprecedented mandate from the people of Goa should take note
that dependence on mining presents extreme externalities and
the State has to tread cautiously promoting a sustainable C
extraction regime to facilitate systematic, scientific and
planned utilization of mineral resources and to streamline
mineral based development of the State, keeping in view,
protection of environment, health and safety of the people in and
around the mining areas rather than race to bottom.” [Emphasis D
supplied by us].
11. Notwithstanding this serious indictment of the pre-existing
‘policy’ for mining natural resources in Goa, the Mineral Policy did not
address itself to the allocation or distribution of the natural resources in
any of its 20 paragraphs and many sub-paragraphs. The topics dealt E
with in the Mineral Policy include objectives and parameters, sustainable
mining and mineral conservation, mineral administration, regulation of
mines and minerals, pollution and its social impact, and policy highlights.
Some of the other topics dealt with in the Mineral Policy include capping,
based on carrying capacity of public roads and to protect inter-
generational equity, mines safety and rehabilitation of affected people, F
stakeholder participation (including corporate social responsibility), welfare
and social responsibilities and establishment of the Goa Minerals
Development Fund etc.
12. However, what is of some significance is that paragraphs 1.4.4
and 1.4.5 of the Mineral Policy state that Goan iron ore is low grade, G
that is having low iron (or Fe) content and that its extraction provides no
or minimal domestic value addition. Almost all the iron ore extracted in
Goa is exported and we were informed that only one mining lease holder
captively consumes Goan extracted iron ore. Paragraphs 1.4.4 and 1.4.5
of the Mineral Policy read as follows: H
378 SUPREME COURT REPORTS [2018] 2 S.C.R.

A “1.4.4 No Domestic Value Addition: The nature of Goan iron ore
is such that value addition opportunities in the domestic market
are minimal. The Chinese and Japanese use Goan iron ore for
blending purposes to bring down the average cost of iron ore,
whereas Indian steel producers have a wide range of high grade
fines to choose from. Despite the closure of mining
B
operations in the neighbouring State of Karnataka, Goan
iron ore is not used in Indian Steel Industry due to its low
Fe content.
1.4.5. Low Grade v/s High Grade: Goan iron ore has always
been of low grade Fe content in comparison with that of Odisha,
C Jharkhand and Karnataka. The low grade of ore has been
competitive in global markets, because of the non reliance
on railways and close distances of mines to ports thereby
reducing the overall cost. The high silica presence in Goan
ore also is a favourable factor for preference for Goan ore over
D Australian and Brazilian low grade ore.” [Emphasis supplied by
us].
13. It appears from the above that the extraction of iron ore in
Goa is geared only towards export and not for domestic purposes because
of the low Fe content and high silica presence.
E Vishwanath Anand Expert Appraisal Committee
14. During the pendency of the writ petition in the Court, the MoEF
constituted an Expert Appraisal Committee (EAC) on 21st March, 2013
with Shri Vishwanath Anand, former Secretary in the MoEF as the
Chairman to specifically look into issues related to illegal mining in the
F State of Goa. The terms of reference of the EAC were as follows:
(a) To examine the information/documents submitted by each
of the 139 project proponents in response to aforesaid direction
dated 14th September, 2012 under Environment (Protection) Act,
1986 for keeping environment clearance in abeyance and making
G case-by-case recommendations to the MoEF;2
(b) To evaluate status of compliance with respect to conditions
stipulated as part of environment clearance;
(c) xxx xxx xxx
2
H Actually 137 project proponents – there is some duplication
THE GOA FOUNDATION v. M/S SESA STERLITE LTD. & ORS. 379
[MADAN B. LOKUR, J.]

(d) To examine the observations relating to MoEF in Justice Shah A
Commission report on illegal mining of iron and manganese ore
in the State of Goa and make appropriate recommendations.
15. The EAC gave its report sometime in October 2013 with regard
to 137 mining leases. Very briefly, the EAC found many of the mining
lease holders had: (i) No approval from the National Board of Wildlife; B
or (ii) Indulged in excess mining; or (iii) Indulged in dump mining; or (iv)
Intersected groundwater level; or (v) No clearance from the Central
Ground Water Board to draw ground water; or (vi) No forest clearance.
We may also note that the EAC also recommended the revocation of
environmental clearance granted to several mining lease holders for a
variety of reasons. C

16. The Mineral Policy and the report of the EAC were perhaps
placed before the Court in the writ petition filed by Goa Foundation and
the transferred cases, but not dealt with, except for a brief mention of
the Mineral Policy.
D
17. All the cases before the Court were heard quite extensively in
September, October and November 2013. Judgment was reserved on
11th November, 2013 and pronounced on 21st April, 2014. Some of the
conclusions arrived at by the Court relevant for our discussions have
already been mentioned above.
E
18. At this stage, it may be mentioned that on 11th November,
2013 read with an order dated 18th November, 20133 this Court constituted
an Expert Committee “to conduct a macro EIA study on what should be
the ceiling of annual excavation of iron ore from the State of Goa
considering its iron ore resources and its carrying capacity keeping in
mind the principles of sustainable development and intergenerational equity F
and all other relevant factors.” The members of the Expert Committee
were:
1. Dr. C.R. Babu (Ecologist)
2. Dr S.C. Dhiman (Geologist/Hydrogeologist)
3. Prof. B.K. Mishra (Mineralogist) G
4. Prof. S. Parameswarappa (Forestry)
5. Shri Parimal Rai (nominee of the Ministry of Environment
and Forests, Government of India).
3
Goa Foundation v. Union of India, (2014) 6 SCC 738 and Goa Foundation v. Union
of India, WP (C) No. 435 of 2012 H
380 SUPREME COURT REPORTS [2018] 2 S.C.R.

A 19. The Expert Committee submitted an Interim Report dated 14th
March, 2014 to the Court after considering reports prepared by the Tata
Energy Research Institute (TERI), New Delhi (1997); TERI and
International Development Research Centre, Ottawa, Canada (2006);
MoEF (2014); research papers prepared by the Goa University and the
National Institute of Oceanography; Indian Institute of Technology (Indian
B
School of Mines), Dhanbad (2013); Pollution Control Board, Goa (Annual
Report) and other literature. It noted large-scale degradation of the
environment in Goa due to mining operations. A Final Report was also
submitted by the Expert Committee to the Court on or about 12th April,
2015 - it was obviously not available to the Court.
C Other proceedings in the High Court
20. Quite independent of the cases pending in this Court, writ
petitions were filed by several mining lease holders in the Bombay High
Court praying either for consideration of their application for a second
renewal of the mining lease or for the grant of a mining lease on second
D renewal. The High Court heard those writ petitions and delivered its
judgment on 13th August, 2014.4 In the course of its judgment, the High
Court referred to the Mineral Policy and observed:
“The State Government also framed Goa Mineral Policy, 2013,
which was duly gazetted on 28th September, 2013 and was placed
E on record before the Supreme Court in Writ Petition (C) 435/
2012. The State Government, in terms of this policy, in principle,
agreed to renew 28 leases. These leaseholders were also asked
to pay stamp duty. In some cases, after payment of the stamp
duty, decision under Section 8(3) of the MMDR Act was taken
F to renew the leases and that decision is also gazetted. Thus, the
petitions are classified in three categories mentioned hereinbelow:
(A) Where there is notification issued in the Official Gazette
after taking a decision for renewal;
(B) Where there is a decision for renewal and there is stamp
duty collected; and
G
(C) Where there are renewal applications made and are still
pending.
All the petitioners initially sought directions to the State
Government to decide their applications for renewal filed in the
4
H Lithoferro v. State of Goa, MANU/MH/1292/2014 = 2014 SCC OnLIne Bom 997
THE GOA FOUNDATION v. M/S SESA STERLITE LTD. & ORS. 381
[MADAN B. LOKUR, J.]

year 2007. However, the petitions which fell in the first two A
categories were subsequently amended and directions were
sought against the Government to execute second renewal lease
deeds.”
21. In its decision, the High Court held: (i) The decision of this
Court [in Goa Foundation] is not an impediment on the State of Goa in B
considering the applications filed by the petitioners before the High Court
for a second renewal of the mining lease. On the contrary, the decision
casts an obligation on the Government of Goa to consider all the
applications for renewal under Section 8(3) of the MMDR Act; (ii)
Consideration of the applications should be in accordance with the Mineral
Policy, the provisions of the MMDR Act and the Rules made thereunder C
and in accordance with constitutional provisions; (iii) The expression
‘fresh leases’ occurring in paragraph 67 (82) of the decision of this Court
[in Goa Foundation] is an affirmation of the law that the renewal of a
lease is also a fresh grant. For arriving at this conclusion, the High Court
placed reliance on State of M.P. v. Krishnadas Tikaram.5 D
The High Court finally held:
“In the case in hand, admittedly, all the petitioners have made
applications for second renewal within the time limit i.e. before
expiry of the term of first renewal of the mining leases. The
mining plans for the second renewal, thereafter, came to be E
approved by the IBM. The IBM also recorded its subjective
satisfaction that the same is in the interest of mineral
development. Thus, there is enough material on record to show
that the Government agreed to grant the second renewal of
mining leases under Section 8(3) of the MMDR Act and F
thereafter amended the Stamp Act and directed some of the
petitioners to pay the stamp duty and even accepted the same.
Thus, the Government gave promise that the mining leases
would be executed under Section 8(3) and pursuant to the
promise, the petitioners altered their position by depositing the
huge stamp duty. Therefore, it is now not open for the G
Government to resile from the promise as it is estopped by the
doctrine of promissory estoppel from doing so. The petitioners
legitimately expected that after payment of the stamp duty, the
Government would execute the second leases under Section
5
1995 Supp (1) SCC 587 H
382 SUPREME COURT REPORTS [2018] 2 S.C.R.

A 8(3) of the MMDR Act. In our considered opinion, the principle
of promissory estoppel is squarely applicable to the facts of
the present case. The Government is reluctant to execute the
lease deeds under Section 8(3) only on the ground that it is not
open for it to do so in the light of the Apex Court judgment in
Writ Petition (C) No. 435/2012. We have already held that the
B
Supreme Court judgment in Writ Petition (C) No. 435/2012 is
not an impediment in the Government’s way in executing the
leases in terms of Section 8(3) of the MMDR Act.”
22. In view of the above conclusions, the High Court passed the
following orders:
C
“(I) The Respondent-State of Goa is directed to execute the
lease deeds under Section 8(3) of the MMDR Act in favour of
the petitioners/lease holders who/which have already paid the
stamp duty pursuant to the orders of the Government, in
accordance with the Goa Mineral Policy, 2013 placed before the
D Supreme Court in Writ Petition (Civil) No. 435/2012 and subject
to the conditions laid down by the Apex Court in the said Writ
Petition.
(II) So far as the petitioners/lease holders who/which have not
paid the stamp duty are concerned, the Respondent-State of Goa
E is directed to decide their renewal applications under Section
8(3), as expeditiously as possible, and preferably within a period
of three months from the date of receipt of copy of this order.”
23. Two petitions for special leave have been filed directed against
the judgment and order passed by the High Court on 13th August, 2014
F being SLP (C) No. 32138 of 2015 and SLP (C) Nos. 32699-32727 of
2015 and these are also before us.
Goa Grant of Mining Leases Policy 2014
24. Keeping in mind the orders and directions passed by this Court
and the High Court, the State of Goa formulated the Goa Grant of Mining
G
Leases Policy 2014. We were informed by the learned Additional Solicitor
General that the Grant of Mining Leases Policy was approved by the
Council of Ministers of the Goa State Cabinet on 1st October, 2014. It
was issued on 4th November, 2014 and placed on the website of the
Directorate of Mines and Geology of the Government of Goa on the
H same day. However, it was gazetted on 20th January, 2015 with two
THE GOA FOUNDATION v. M/S SESA STERLITE LTD. & ORS. 383
[MADAN B. LOKUR, J.]

paragraphs deleted from the document issued on 4th November, 2014. A
The two deleted paragraphs are indicated below.
25. The Grant of Mining Leases Policy makes for some very
important and interesting reading and includes an impassioned plea for
rejecting the process of competitive bidding of mining leases for the
time being. It also contains the statement made by the Chief Minister B
on the floor of the Goa State Legislative Assembly. While the Grant of
Mining Leases Policy is a large document, it is necessary to read relevant
extracts from it since it indicates the factors that went into taking the
policy decision and also to appreciate if there was any violation of Article
14 of the Constitution. The relevant extracts read as under:
C
Background.–– In accordance with the Directions contained in
the judgment and order of the Hon’ble Supreme Court dated
21st April, 2014 in Writ Petition (Civil) No.435 of 2012, the
Hon’ble Supreme Court has declared that all the Mining Leases
in the State of Goa have expired on 22nd November, 2007.….
D
It has further been directed by the Hon’ble Supreme Court that
it is for the State Government to decide as a matter of Policy,
in what manner Mining Leases are to be granted in the
future…..
The Hon’ble Supreme Court has in its Judgment and Order dated E
21st April, 2014 clearly held that the action of allowing the mines
to be run on Deemed Extension Basis from the years 2007 to
2012 was completely illegal and has further declared that the so-
called deemed mining leases in the State of Goa have expired in
the year 2007…..
F
Few things emerge out of the Hon’ble Supreme Court’s Order.
In the first place, the mining leases have been held to have
expired in the year 2007. In the second place, the State
Government has been directed, in accordance with its
policy to grant fresh leases in the State.
G
With these, the options available with the State Government are
as follows:–
The State Government can directly auction the leases in
order to secure the best returns for the grant of leases by way of
a competitive bidding process,
H
384 SUPREME COURT REPORTS [2018] 2 S.C.R.

A (a) The State Government can also form a State Corporation
and undertake the mining activities through the State Mineral
Development Corporation.
(b) The State Government could also proceed to grant fresh
leases, in terms of the MMRD Act by the following the
B process of preferential grant of leases to certain persons
as specified in the MMRD Act.
(c) Yet another option available to the State Government was
to decide the renewal applications which were pending since
the year 2006 and which had remained without any disposal.
C Each of the aforesaid modes has its own merits and de-merits….
While the State Government was in the process of deliberating
on all these issues at various levels, the judgment and order of
the Hon’ble High Court in Writ Petition filed by certain lease
holders came to be delivered on 13th August, 2014 whereby the
D Hon’ble High Court has directed the execution of the Lease
Deeds under Section 8(3) of the MMRD Act in favour of the
lease holders who have already paid the stamp duty pursuant to
Orders of the State Government in accordance with the Goa
Mineral Policy, 2013, placed before the Hon’ble Supreme Court
E and subject to the conditions…..
This judgment and order of the Hon’ble High Court
virtually leaves no choice to the State Government, thereby
to completely abandon the process of competitive bedding
[bidding] for earning the best revenue to the State
F Government. While this was the position taken by the State
Government in the Goa Mineral Policy, 2013, and the
Hon’ble High Court has interpreted the Order of the Hon’ble
Supreme Court in Writ Petition (Civil) No.435/2012, the State
Government in view of Hon’ble High Court order, has for
the present ruled out the process of going for competitive
G bidding. The State Government is considering actively, within
its Constitutional powers and functions, to come out with
regulatory and controlling measures and levy and collect
appropriate returns having regard to the fact that the soil
comprising the land belongs to the State…. The State
Government has also commenced the inquiry and investigation
H
THE GOA FOUNDATION v. M/S SESA STERLITE LTD. & ORS. 385
[MADAN B. LOKUR, J.]

into the violations of matters under Rule 37 and 38 of the Mineral A
Concession Rules, 1960 as directed by the Hon’ble Supreme
Court….
As is seen from the aforesaid, the Judgment and order of the
Hon’ble High Court is an intervening circumstance inasmuch as
it directs the execution of Lease Deeds in 28 cases and B
consideration of the Application under Section 8(3) by the State
Government in the other cases….
In the considered Opinion of the State Government, it would be
futile to challenge the Judgment of the Hon’ble High Court before
the Hon’ble Apex Court as that would once again delay the C
commencement of the Mining Operations. As a matter of fact, a
substantial portion of the State’s Revenue comes from the Mining
Sector. The State has been virtually starved of funds for
undertaking many activities including Infra-structural Projects;
and on account of the stopping of the Mining Operation, the
State had to walk a tight-rope as there has been no Revenue D
coming from one of the major source of Revenue….
Having regard to the aforesaid, the State Government thought it
proper to act in accordance with the Directions of the Hon’ble
Supreme Court by balancing the equities, needs; as also to
sub-serve the Public Interest and by having sustainable E
development by protecting the Ecological and all other
factors.
Policy Framework.–– The State Government has been
considering and deliberating the entire matter, and thought it
proper having regard to the facts that: F
(a) The Mining Lease Holders had applied for the Second
Renewal well within time.
(b) The fact that the Applications of the Mining lease holders for
the Second Renewal were not disposed off by the then State
G
Government and for which the Lease Holders cannot be blamed.
(c) Having further regard to the fact that 27 mining Lease Holders
despite the closure of the mining operations, when called by the
State to do so within the period, have paid the Stamp Duty; as
also, other levies.
H
386 SUPREME COURT REPORTS [2018] 2 S.C.R.

A (d) Such payments helped the State Government to override the
financial crisis at that point of time.
(e) Having regard to the fact that a large number of labour staff
employed with these lease holders.
(f) That concerned Mining Lease Holders have invested heavily
B into the development of Mines; as also, into the Machinery such
as Ripper Dozers, Cranes, wheel loader, Beneficiation plants etc.
(g) Other methods are not as suitable as this method for various
reasons listed [in] Hon’ble Chief Minister statement to the House
listed above.
C
The State Government after having considered the matter from
every possible angle, has decided to exercise its Power under
Section 8(3) of the Mines and Mineral Regulations and
Development Act, 1957, and to consider each of the cases on
their own merits and subject to compliance with the Conditions
D which may be laid down by the State Government including for
strict Pollution Control measures, and thereafter take a decision
on the renewal in terms of Section 8(3) of the MMRD Act, 1957,
complying fully with the Procedure laid down therein.
Though the State Government has in principle decided to follow
E the route of the renewal of Lease under Section 8(3) of the
MMRD Act, it shall be subject to the following:-
Unless and until the Inquiry initiated pursuant to the Judgment
and Order of the Honourable Supreme Court of India against
those Mine Lease Holders found to be violating either Rule 37
F or Rule 38 of the Mineral Concession Rules 1960, or otherwise
indicted in the Report of the Justice Shah Commission/PAC
report or found to be engaged in, any kind of illegality of
whatsoever nature such as illegal Sale of Ore, Sale of Royalty
Challan without Ore, Encroachment of adjoining areas outside
the lease over production in excess of the limit specified in the
G
Environmental Clearance; those which have undertaken
unscientific mining operations; those who have violated or have
not paid the Royalty amount; those who have re-used old Royalty
Challans for defrauding; and those involved in Illegal Mining
Activities shall not be considered for renewal of the Mining
H Leases.
THE GOA FOUNDATION v. M/S SESA STERLITE LTD. & ORS. 387
[MADAN B. LOKUR, J.]

For this purpose, presently the inquiries are in progress at A
various levels and foras including the investigation by the SIT
Team, by the Team of Chartered Accountants which have been
set up by the State Government and after the Inquiry is complete
or during the course of the inquiry where it is found that any
violations have taken place, such persons shall not be
B
considered for Grant/Renewal of the Leases…..
Those Mining Lease Holders who have paid Stamp Duty,
in which there are no violations found in terms of Mr.
Justice Shah Inquiry/Public Accounts Committee Report,
shall be considered for Renewal. [Deleted from the gazetted
Policy]. C

The formation of the entire Policy is aimed that it is required to
balance various interests having regard to the Principle of
Sustainable Development; but by keeping in mind the commercial
interest of the present state of economy, the interest of the labour
class, the interest of the working class including other staff, the D
interest of the market in the Mining Localities, the interest of the
Public Sector, the interest of the existing Mining Lease Holders
and the overall welfare needs of the State; and require all urgent
infrastructural development. By balancing all these interests the
present Policy has been formulated by the State Government.” E
The above policy is in principle decision of the State
Government and will be vetted for exact legal
requirements from specific necessities as also from
financial view points and notified thereafter.”6 [Deleted from
the gazetted Policy]. [Emphasis supplied by us]. F
26. Around this time, and pursuant to the Budget Speech given by
the Hon’ble Minister of Finance of the Government of India on 10 th July,
2014 it appears that steps were being taken by the concerned Ministry
in the Government of India to amend the MMDR Act.7 In fact a draft
6
http://www.goadmg.gov.in/Uploads/288.pdf G
7
122. “It is my Government’s intention to encourage investment in mining sector and
promote sustainable mining practices to adequately meet the requirements of industry
without sacrificing environmental concerns. The current impasse in mining sector,
including, iron ore mining, will be resolved expeditiously. Changes, if necessary, in
the MMDR Act, 1957 would be introduced to facilitate this.” [Emphasis supplied
by us].
H
388 SUPREME COURT REPORTS [2018] 2 S.C.R.

A Mines and Minerals (Development and Regulation) Act, 2014 was
prepared on or about 16th November, 2014 and uploaded on the website
of the Ministry of Mines on 17th November, 2014. This information was
placed before us from the response given by the Hon’ble Minister of
Mines to Unstarred Question No. 2485 to be answered in the Lok Sabha
on 8th December, 2014. The question was:
B
(a) whether the Government proposes to formulate a new policy
on grant of mining leases for various minerals by amending the
Mines and Minerals (Development and Regulation) Act, 1957;
(b) if so, the details thereof along with the time by which the
C new policy is likely to be implemented;
And the answer was:
(a) & (b): Yes Madam. The Ministry has drafted the Mines and
Minerals (Development and Regulation) (MMDR) (Amendment)
Bill, 2014, which has been uploaded on the website of the Ministry
D on 17.11.2014, calling for comments/suggestions on the draft Bill.
The last date for receipt of the comments/suggestions is 10th
December 2014. Based on the comments/suggestions received
the draft Bill will be finalized and taken forward for introduction
in the Parliament.
E The Bill is designed to put in place mechanisms for: (i) Improved
transparency in the allocation of mineral resources; (ii) Obtaining
for the government its fair share of the value of such resources;
(iii) Attracting private investment and the latest technology; and
(iv) Eliminating delay in administration, so as to enable expeditious
F and optimum development of the mineral resources of the country.
27. What was the nature of the proposed amendments? As far as
we are concerned, the introduction of Section 10B in the MMDR Act
(relating to competitive bidding) is significant and this reads:
“Mining leases for notified minerals
G 10B. (1) Notwithstanding anything contained elsewhere in this
Act, but subject to the provisions of Section 10A and Section
17A, the procedure for obtaining a mining lease for notified
minerals in respect of land in which the minerals vest in the
Government shall be as laid down in this Section.
H
THE GOA FOUNDATION v. M/S SESA STERLITE LTD. & ORS. 389
[MADAN B. LOKUR, J.]

(2) and (3) xxx A
(4) For the purpose of granting a mining lease in respect of any
notified mineral in such notified area, the State Government shall
select, through auction by a method of competitive bidding,
including e-auction, an applicant who satisfies the eligibility
conditions. B
(5) The Central Government shall prescribe the terms and
conditions, and procedure, subject to which the auction will be
conducted, including the bidding parameters for the selection,
which could include a share in the production of the mineral, or
any payment linked to the royalty payable, or any other relevant C
parameter, or any combination or modification of them.
(6) and (7) xxx”
[Iron ore was proposed as a notified mineral in the draft statute].
28. Immediately after 4th November, 2014 (the date on which the D
Grant of Mining Leases Policy was uploaded on the website of the
Government of Goa) the State Government commenced granting a second
renewal of the mining leases from 5th November, 2014 onwards and that
process was completed on 12th January, 2015. The following table gives
the dates of second renewal of 88 mining leases granted by the State
Government on or before 12th January, 2015: E

Sr. No. Date of renewal order Number of renewal
orders passed
1. 5.11.2014 5
2. 6.11.2014 5
3. 7.11.2014 3 F
4. 10.12.2014 3
5. 24.12.2014 10
6. 1.1.2015 3
7. 2.1.2015 3
8. 5.1.2015 2 G
9. 6.1.2015 22
10. 9.1.2015 1
11. 12.1.2015 31
TOTAL = 88

H
390 SUPREME COURT REPORTS [2018] 2 S.C.R.

A 29. The date of 12th January, 2015 is significant since on that date
the President promulgated the Mines and Minerals (Development and
Regulation) Amendment Ordinance, 2015 (which was later enacted by
Parliament) whereby the grant of mining leases for notified minerals
was through competitive bidding or the auction process. It is important
to mention here that the approval of the Ordinance by the Cabinet of the
B
Government of India became public knowledge on 5th January, 20158
and it is within a week from that date that the Government of Goa granted
a second renewal to 25 mining leases and to make matters worse, a
second renewal was granted to 31 mining leases on 12th January, 2015
the day the Ordinance came into force making a total of 56 renewals of
C mining leases.
Environmental clearance and orders dated 20th March, 2015
30. Following the renewal of 88 mining leases, the State of Goa
requested the MoEF by letters dated 7th January, 2015 and 5th February,
2015 to lift the abeyance order of 14 th September, 2012 on the
D environmental clearances. Consequently, the MoEF passed three orders
on 20th March, 2015 (the actual sequence of the orders is not very clear).
31. The first order of 20th March, 2015 was in the form of a letter
addressed to the Principal Secretary, Environment, Government of Goa
and it recorded that MoEF had considered all the 139 cases in which the
E abeyance order has been passed and had taken into account the request
of the State Government, the recommendation of the EAC and the
directions of this Court. It was noted that the EAC had observed that
there were violations of the following nature: (i) No clearance from the
National Board of Wildlife and non-compliance of orders of this Court
F on the subject; (ii) Excess production; (iii) Dump mining; (iv) Intersecting
ground water table and drawal of ground water without permission of
the Central Ground Water Board; (v) No forest clearance obtained where
required; (vi) Encroachment and false information/concealment of fact.
It was stated that the MoEF had decided to refer the cases to the
8
http://www.businesstoday.in/current/economy-politics/narendra-modi-cabinet-
G approves-ordinance-for-mines-auction/story/214253.html
https://timesofindia.indiatimes.com/business/india-business/Cabinet-approves-
ordinance-for-mines-auction/articleshow/45765290.cms
http://www.financialexpress.com/economy/reforms-cabinet-approves-ordinance-for-
mines-auction/26342/
http://www.livemint.com/Politics/VDXphnUmPYGbN4lmzEBslK/Govt-passes-
H executive-order-to-auction-minerals.html
THE GOA FOUNDATION v. M/S SESA STERLITE LTD. & ORS. 391
[MADAN B. LOKUR, J.]

appropriate authorities (including the State Government) for taking action A
on the violations. Accordingly, a request was made to examine the report
of the EAC and take appropriate action against the concerned lessees.
32. The second order passed on 20th March, 2015 was an Office
Memorandum to the effect that if a project proponent has a valid and
subsisting environmental clearance for a mining project under the B
Environment Impact Assessment Notification of 27th January, 1994 (EIA
1994) or Environment Impact Assessment Notification of 14th September,
2006 (EIA 2006), it will not be required to obtain a fresh environmental
clearance at the time of renewal of the mining lease. This was subject
to the maximum period of validity of 30 years for the environmental
clearance for a mining lease. C

33. The third order passed on 20th March, 2015 related to lifting
the abeyance order dated 14th September, 2012 on the environmental
clearance of the mining leases for iron ore and manganese ore. The
cases of all 139 mining leases in which the abeyance order was passed
were considered and the abeyance order lifted in respect of 72 cases. D
The details in this regard are given in the table below:
Number Remarks Remaining
Total mines = 139
2 Inadvertent repetitions 137
2 Already withdrawn 135 E
12 Fully located in Protected Area (abeyance 123
order cannot be lifted)
6 Partly located in Protected Area (abeyance 117
order cannot be lifted)
23 Within 1 km. of Protected Area (awaiting 94
modification of order dated 4.8.2006 passed
F
by this Court)
22 Not having any Forest Clearance and will 72
be considered only after clearance is
obtained
35 Environmental Clearance already granted 37
under EIA Notification of 27.1.1994 and no
fresh clearance is required in view of Office G
Memorandum dated 20.3.2015.
Abeyance order lifted.
37 Environmental Clearance already granted 0
under EIA Notification of 14.9.2006.
Abeyance order lifted.
Abeyance order lifted on 20th March, 2015 for 72 mines out of 139 H
392 SUPREME COURT REPORTS [2018] 2 S.C.R.

A 34. The third order of 20th March, 2015 also placed certain
additional specific conditions while lifting the abeyance order. These
additional conditions were:
1. State Government of Goa shall develop and implement a credible
mechanism to regularly monitor and ensure that capping of 20
B MTPA on the mining leases in the State of Goa is implemented
as per the directions of Hon’ble Supreme Court in its order dated
21.04.2014 and any further order in the matter of Goa Foundation
vs. Union of India in W.P. 435 of 2012.
2. No Mining shall be allowed in the forest land for which FC [forest
clearance] is not available.
C
3. The Mining of dumps is not permitted unless mentioned in
approved mine plan and Environmental Clearance letter.
4. Dumping of material outside the mine lease is not permitted unless
mentioned in approved mine plan and Environmental Clearance letter.
D 5. Prior permission be obtained from Central Ground Water Board
for drawl of ground water and intersection of ground water table
as applicable.
6. Violations will be dealt as per the existing law and lifting of
abeyance of EC will not in any manner affect that.
E 7. If any violation is observed in future the environmental clearance
will be cancelled as per rules.
8. State Government will take action in cases of violation under
Section 15/19 of Environment (Protection) Act, 1986 as noted
and recommended in EAC report.
F 9. Project Proponent will file six monthly compliance to Regional
Officer, MoEFCC and State Pollution Control Board.
Questions for consideration
35. Broadly speaking, on the basis of the submissions and
documents placed before us, the questions raised by the Goa Foundation,
G the State of Goa, the Union of India and the mining lease holders are
three-fold:
(a) Relatable to the second renewal of the mining leases: (i) In view of
the decision in Goa Foundation only fresh leases were to be granted
by the State of Goa and not second renewals. (ii) For granting fresh
H leases, the State of Goa should have introduced competitive bidding or
THE GOA FOUNDATION v. M/S SESA STERLITE LTD. & ORS. 393
[MADAN B. LOKUR, J.]

the auction process. (iii) Assuming the decision to grant a second renewal A
to the mining lease holders was valid, the second renewals were not in
accordance with law and should be set aside.
(b) Relatable to the grant of environmental clearances: In view of the
decision in Goa Foundation fresh environmental clearances were
required to be obtained by the mining lease holders. B
(c) The impugned judgment and order passed by the High Court in
Lithoferro on 13th August, 2014 was erroneous and deserves to be set aside.
Whether fresh mining leases were required to be granted?
36. The controversy in this regard has arisen in view of what is C
stated in paragraph 82 of the decision in Goa Foundation. It was stated
as follows:
“As we have held that the deemed mining leases of the lessees
in Goa expired on 22-11-1987 and the maximum period (20 years)
of renewal of the deemed mining leases in Goa has also expired D
on 22-11-2007, mining by the lessees in Goa after 22-11-2007
was illegal. Hence, the Order dated 10-9-2012 of the Government
of Goa suspending mining operations in the State of Goa and the
Order dated 14-9-2012 of MoEF, Government of India,
suspending the environmental clearances granted to the mines
in the State of Goa, which have been impugned in the writ E
petitions in the Bombay High Court, Goa Bench (transferred to
this Court and registered as transferred cases) cannot be quashed
by this Court. The Order dated 10.9.2012 of the
Government of Goa and the Order dated 14.9.2012 of the
MoEF will have to continue till decisions are taken by the F
State Government to grant fresh leases and decisions are
taken by MoEF to grant fresh environmental clearances
for mining projects.” [Emphasis supplied by us].
37. The issue that arose for discussion before us was the meaning
and intention of the Court in the context of grant of ‘fresh leases’ for
G
mining projects. Did the Court literally mean that a fresh mining lease
was required to be granted or was a second renewal sufficient
compliance?
38. As the above quoted paragraph indicates, the Court was aware
and conscious of the fact that the mining leases had expired on 22nd
H
394 SUPREME COURT REPORTS [2018] 2 S.C.R.

A November, 2007 and the mining operations thereafter carried out by the
mining lease holders was illegal. For this reason, the Court held that the
suspension order passed by the State of Goa on 10th September, 2012
and the abeyance order passed by the MoEF on 14th September, 2012
did not require any interference.
B 39. Since the mining operations carried out after 22nd November,
2007 were illegal, the Court, in subsequent paragraphs of the judgment
noted (as a follow up) that an order was passed on 5th October, 2012
suspending transportation of iron ore and manganese ore from those
leases identified by the Justice Shah Commission.9 Thereafter on 11th
November, 2013 it was directed that an inventory be made of the
C excavated mineral ores and the inventoried mineral ores be sold by e-
auction under the supervision of a Monitoring Committee.10
40. Further, it was held by the Court on 21st April, 2014 that from
the e-auction sale of the mineral ores, the mining lease holders would be
entitled to the average cost (not the actual cost) of extraction, the workers
D would be entitled to 50% wages and allowances on the principle of laid-
off compensation and the Marmagao Port Trust would be entitled to
50% of the storage charges. Out of the balance amount, 10% would be
appropriated to the Goan Iron Ore Permanent Fund for the purpose of
sustainable development and intergenerational equity and the remaining
E amount would be appropriated by the State who is the owner of the
mineral ores illegally excavated by the mining lease holders and sold by
e-auction.
With this in mind, the Court declared in paragraph 87.5 of the
Report:
F “It is for the State Government to decide as a matter of
policy in what manner mining leases are to be granted in
future but the constitutionality or legality of the decision of the
State Government can be examined by the Court in exercise of
its power of judicial review.” [Emphasis supplied by us].
G It was then directed by the Court in paragraph 88.4 of the Report
as follows:
“The State Government may grant mining leases of iron ore
and other ores in Goa in accordance with its policy decision and
9
Goa Foundation v. Union of India, WP (C) 435 of 2012 – order dated 5 th October, 2012
H 10
Goa Foundation v. Union of India, (2014) 6 SCC 738
THE GOA FOUNDATION v. M/S SESA STERLITE LTD. & ORS. 395
[MADAN B. LOKUR, J.]

in accordance with the MMDR Act and the Rules made A
thereunder in consonance with the constitutional provisions.”
[Emphasis supplied by us].
41. The Court was quite obviously aware that it was concerned,
inter alia, with the second renewal of mining leases and yet it chose to
recount the factual situation, make a declaration and pass a direction B
without adverting to the possibility of a second renewal of a mining lease.
The Court was also conscious that the mining lease holders had carried
out indiscriminate and illegal mining for about five years (from November
2007 to September 2012) and had made profits out of the illegal mining.
The Court, in our opinion, was rather charitable in not penalizing the
mining lease holders for the illegal mining carried out by them. But be C
that as it may, quite clearly, the sequence of events from September
2012 onwards, the appointment of a Monitoring Committee to dispose of
the illegally mined ore, the declaration and direction unmistakably point
to the intention of the Court to end the sordid chapter of illegal mining by
the lease holders and start on a clean slate. Viewed in this perspective, D
we have no doubt that the Court really did intend the State of Goa to
consider the grant of fresh leases in accordance with law.
42. In this context, the declaration of the Court in Goa Foundation
in paragraph 87.5 of Report is also quite clear, namely, “It is for the State
Government to decide as a matter of policy in what manner mining leases E
are to be granted in future….” The declaration was explicit and related
to the grant of mining leases and not a second renewal.
43. Similarly, the direction given in paragraph 88.4 of the Report
that “The State Government may grant mining leases of iron ore and
other ores in Goa in accordance with its policy decision…..” was equally F
explicit and related to the grant of mining leases and not a second renewal.
44. Subsequent events confirm our impression and view. The
decision of the Court to e-auction the mined mineral ore was sought to
be recalled through I.A. No. 86 of 2014 filed by M/s Bandekar Brothers
Private Ltd. The applicant prayed for a direction to restrain the authorities G
from e-auctioning the iron ore mined by it prior to 22nd November, 2007
and that the mined ore should be released to the applicant with the right
to dispose of the same. A Bench of three learned judges (other than
those that decided Goa Foundation) noted that: “The submissions
advanced on behalf of the applicant were premised merely on the
assertion, that the mineral ore which the applicant was claiming a right H
396 SUPREME COURT REPORTS [2018] 2 S.C.R.

A over, had been legitimately mined before 22.11.2007, and therefore, the
applicant had an absolute and legitimate ownership over the same. We
may note, that the above position was emphasized, stressed and
persistently reiterated to make the stand absolutely crystal clear.” The
learned judges considered the submissions and held by an order dated
14th October, 2014 that the direction in Goa Foundation was clear and
B
categorical that the iron ore vested in the State Government and therefore
the application deserved dismissal. In other words, the mining lease
holders deserved no latitude for the illegal mining and all issues needed
to be dealt with strictly.
45. There is additional material to support the view that the Court
C had intended the State of Goa to grant fresh mining leases rather than
grant a second renewal.
46. From a reading of the decision rendered by the Bombay High
Court in Lithoferro (subject matter of SLP (C) No. 32138 of 2015 and
SLP (C) Nos. 32699-32727 of 2015) it is evident that the State of Goa
D understood the decision of this Court in Goa Foundation to mean that
fresh mining leases were required to be granted on the basis of a policy
yet to be framed by the State of Goa and the issue of second renewals
did not survive consideration. The contention of the learned Advocate
General of the State of Goa in this regard is recorded by the High Court
E in the following words:
“The learned Advocate General [of the State of Goa] took us
through the Judgment of the Apex Court in Writ Petition (C)
435/2012 and relied upon the observations of the Supreme Court
in paras 67, 68, 69 and 70. The learned Advocate General
F submitted that the Honourable Supreme Court has held that the
deemed mining leases of the lessees in Goa expired on
22nd November, 1987 and the maximum of 20 years renewal
period of the deemed mining leases in Goa as provided under
subsection (2) of Section 8 of the MMDR Act, read with sub-
Rules 8 and 9 of Rule 24-A of the MC Rules expired on
G 22 nd November, 2007. The learned Advocate General
submitted that in view of these findings of the Supreme
Court, there is no question of renewal of the mining leases.
The learned Advocate General submitted that in terms of
the Supreme Court decision, it is for the State Government
H to grant fresh leases in accordance with the policy which
THE GOA FOUNDATION v. M/S SESA STERLITE LTD. & ORS. 397
[MADAN B. LOKUR, J.]

is yet to be framed. The learned Advocate General submitted A
that the Supreme Court has kept Writ Petition (C) 435/2012
pending and, therefore, it is for the petitioners to approach the
Supreme Court and seek appropriate orders. The learned
Advocate General submitted that the orders on which the
petitioners rely, at the most show that the Government in
B
principle has agreed for renewal of the leases for a further
period of 20 years and the same was not a final decision.
He submitted that in terms of the said decision of the Apex
Court, it is for the State Government to frame a fresh
mining policy and after framing the same, to decide granting
of fresh mining leases.” [Emphasis supplied by us]. C
47. While considering the submissions of the learned Advocate
General and learned counsel, the High Court noted that this Court was
alive to the fact that the State of Goa had granted in-principle second
renewal to 28 mining leases and had collected renewal fees or stamp
duty from 27 mining leases (presumably out of the 28 mining leases) as D
stated in the brief resume filed by the State of Goa in this Court. The
High Court noted:
(II) In the brief resume presented by the State of Goa and placed
on record of the Supreme Court, in Writ Petition (C) 435/2012, it
is inter alia, mentioned thus: E
“…Presently in the State of Goa, it is found that the Applications
for Renewal were filed well within time as contemplated by Rule
24A of the Mineral Concession Rules, 1960. Presently, the State
has ordered renewal of 28 mining leases, granted in principle
approvals and has collected Renewal Fees/Stamp Duty from 27 F
Mining Leases..”
48. In other words, notwithstanding the in-principle grant of second
renewal of 28 mining leases and collection of renewal fees or stamp
duty, this Court in Goa Foundation consciously required the State of
Goa to grant fresh leases. What is equally significant is that the State of G
Goa also understood the decision of the Court in the same manner and
intended to act on that basis.
49. Unfortunately, the State of Goa was overtaken by events in
that the High Court delivered its judgment in Lithoferro on 13th August,
2014 and while doing so, it misunderstood or incorrectly appreciated the
H
398 SUPREME COURT REPORTS [2018] 2 S.C.R.

A decision of this Court in Goa Foundation and disagreed with the view
of the State of Goa. While this Court had required the State of Goa to
grant fresh mining leases and the State of Goa was willing to comply
with this direction, the High Court instead directed it to execute mining
leases under Section 8(3) of the MMDR Act in respect of those who
had paid the renewal fees or stamp duty. The High Court also directed
B
the State of Goa to decide their pending second renewal applications
within a period of three months keeping in mind the provisions of Section
8(3) of the MMDR Act (presumably after paying the renewal fees or
stamp duty in terms of the Government order of 21st February, 2013).
The understanding by the High Court of the decision of this Court in
C Goa Foundation is totally incorrect.
50. It appears from the contents of the Grant of Mining Leases
Policy that in view of the decision of this Court in Goa Foundation the
State was actively considering a policy for granting fresh mining leases
by considering several factors. However, the decision and directions of
D the High Court supervened leaving no choice, according to the State, but
to completely abandon the process of grant of fresh mining leases through
the process of competitive bidding for earning revenue and justify the
abandonment.
51. As per the Grant of Mining Leases Policy, the State of Goa
E therefore had two realistic options before it: (i) To implement the judgment
and order of this Court in Goa Foundation (as understood by the State
of Goa) and grant fresh mining leases in the manner felt appropriate and
in accordance with law; (ii) To abide by the judgment of the High Court
(and its understanding of the judgment of this Court in Goa Foundation
while rejecting its understanding by the State of Goa) and grant second
F renewal to the mining leases in terms of Section 8(3) of the MMDR
Act. The State of Goa appears to have taken the view that challenging
the decision of the High Court (and therefore abiding by the decision of
this Court) would delay the commencement of mining operations. The
State took into consideration that a substantial portion of its revenue
G comes from the mining sector and that the State had been virtually starved
of funds on account of stoppage of mining operations. Therefore, the
State decided to grant a second renewal to the mining leases and not
grant fresh leases. This is quite apparent from the contents of the Grant
of Mining Leases Policy wherein the above facts and conclusions have
been stated in greater detail. Was this decision correct?
H
THE GOA FOUNDATION v. M/S SESA STERLITE LTD. & ORS. 399
[MADAN B. LOKUR, J.]

52. Learned counsel for the mining lease holders submitted that A
the renewal of a mining lease is equivalent to or amounts to the grant of
a fresh lease and therefore when the mining leases were renewed, it
amounted to the grant of a fresh lease in compliance with the directions
of this Court. Reliance was placed upon Delhi Development Authority
v. Durga Chand Kaushish11 wherein this Court held:
B
“A renewal of a lease is really the grant of a fresh lease. It is
called a “renewal” simply because it postulates the existence of
a prior lease which generally provides for renewals as of right.
In all other respects, it is really a fresh lease.”
53. Reference was also made to Provash Chandra Dalui v. C
Biswanath Banerjee12 in which it was held in paragraph 14 of the Report
that there is a distinction between extension of a lease and renewal of a
lease. We do not find any relevance of this to our discussion. Reference
was also made to the view expressed in M.C. Mehta v. Union of India13
wherein this Court noted that it is settled law that grant of renewal is a
fresh grant and must be consistent with law. D

54. Finally reliance was placed on State of West Bengal v. Calcutta
Mineral Supply Company Private Limited14 in which decision it was
noted in paragraph 31 of the Report that the renewal of a lease is a fresh
grant. This decision also refers to Gajraj Singh v. State Transport
Appellate Tribunal15 wherein this Court observed in paragraph 38 of E
the Report that the grant of renewal is a fresh grant though it breathes
life into the operation of the previous lease or licence granted.
55. There is no doubt that the renewal of a lease is virtually the
same as the grant of a fresh lease but a converse direction to grant a
mining lease cannot be understood to mean granting a renewal of a F
mining lease. Obviously, the grant of a fresh lease is not the same as the
renewal of a lease and when the Court in Goa Foundation required the
State of Goa to grant a fresh lease, it did not require the State to renew
the existing (expired) lease. The Court could have explicitly declared
and directed the State of Goa to grant a second renewal of the mining G
leases rather than to say it in a roundabout manner that it should do so by
11
(1973) 2 SCC 825
12
1989 Supp (1) SCC 487
13
(2004) 12 SCC 118
14
(2015) 8 SCC 655
15
(1997) 1 SCC 650 H
400 SUPREME COURT REPORTS [2018] 2 S.C.R.

A granting a fresh lease equivalent to a renewal. We simply cannot accept
the submissions made by learned counsel for the mining lease holders in
this regard.
56. That apart, as we have already noted above, the context and
material on record disabuse the thought that the Court in Goa Foundation
B did not mandate the grant of fresh mining leases in accordance with law.
57. Learned counsel for the mining lease holders contended that
the very same learned judges that decided Goa Foundation permitted
the State Government in Common Cause v. Union of India16 to consider
granting a second renewal of mining leases under Section 8(3) of the
C MMDR Act. Therefore the requirement in Goa Foundation for the
grant of ‘fresh leases’ must be understood in a manner similar to what
was directed in Common Cause. We are unable to accept this contention.
The direction given in Common Cause was an interim direction and not
a final direction as in Goa Foundation. Moreover, the facts in both
cases are not at all similar so as to warrant a similar order being passed
D or understood. Finally, the fact that the same set of learned judges thought
it fit to direct the grant of ‘fresh leases’ in one set of cases and thought
it fit to direct consideration of a ‘second renewal’ in another set of cases
indicates that the learned judges were aware of the difference in
directions. Therefore when the leaned judges directed the grant of ‘fresh
E leases’ in Goa Foundation it was a deliberate and conscious decision
distinct and different from granting a second renewal of expired mining
leases.
58. In our opinion, the direction in Goa Foundation is quite clear
and instead of considering the grant of a second renewal of the mining
F leases, the State of Goa was required to consider the grant of fresh
mining leases. Therefore the decision of the State of Goa to grant a
second renewal of the mining leases is erroneous, contrary to the decision
in Goa Foundation and must be and is quashed.
Whether the State of Goa should have auctioned the mining
G leases?
59. As mentioned in the Grant of Mining Leases Policy there were
several options available to the State of Goa. It took the view that all its
options were foreclosed post the decision of the High Court and it was
obliged to grant a second renewal of the mining leases. We have already
H 16
(2014) 14 SCC 155
THE GOA FOUNDATION v. M/S SESA STERLITE LTD. & ORS. 401
[MADAN B. LOKUR, J.]

held that this was not so and that the decision to grant a second renewal A
of the mining leases was erroneous and fresh leases were required to be
granted in accordance with the decision in Goa Foundation. In view of
our conclusion, the discussion on whether the State of Goa should have
auctioned the mining leases through a process of competitive bidding is
now rendered academic. However, since detailed submissions were made
B
by learned counsel on both sides, including by the learned Additional
Solicitor General, we propose to express our views on the subject.
60. The discussion on the question of auction being the only method
of allocation or disposal of natural resources arose due to the view
expressed by this Court in Centre for Public Interest
Litigation v. Union of India.17 In that decision (hereafter referred to C
as CPIL – although this case is generally referred to as the 2G scam
case) the Court dealt with the question of following a non-discriminatory
policy for alienation of natural resources. While doing so it was observed
that an auction is “perhaps the best method for discharging this burden”
and concluded by holding that “while transferring or alienating the natural D
resources, the State is duty-bound to adopt the method of auction by
giving wide publicity so that all eligible persons can participate in the
process.” This led to the belief that the view of this Court was that
natural resources should be alienated or disposed of only by auction and
by no other method. The Court held in paragraphs 95 and 96 of the
Report as follows: E

“This Court has repeatedly held that wherever a contract is to
be awarded or a licence is to be given, the public authority must
adopt a transparent and fair method for making selections so
that all eligible persons get a fair opportunity of competition. To
put it differently, the State and its agencies/instrumentalities must F
always adopt a rational method for disposal of public property
and no attempt should be made to scuttle the claim of worthy
applicants. When it comes to alienation of scarce natural
resources like spectrum, etc. it is the burden of the State to ensure
that a non-discriminatory method is adopted for distribution and G
alienation, which would necessarily result in protection of national/
public interest.
In our view, a duly publicised auction conducted fairly and
impartially is perhaps the best method for discharging this burden
17
(2012) 3 SCC 1 H
402 SUPREME COURT REPORTS [2018] 2 S.C.R.

A and the methods like first-come-first-served when used for
alienation of natural resources/public property are likely to be
misused by unscrupulous people who are only interested in
garnering maximum financial benefit and have no respect for
the constitutional ethos and values. In other words, while
transferring or alienating the natural resources, the State
B
is duty-bound to adopt the method of auction by giving
wide publicity so that all eligible persons can participate
in the process.” [Emphasis supplied by us].
61. In Manohar Lal Sharma v. Principal Secretary18 a Bench
of 3 judges of this Court paraphrased the above passages and observed
C that the view expressed in CPIL necessitated a reference by the President
of India to this Court under Article 143(1) of the Constitution being Special
Reference No. 1 – Natural Resources Allocation.19
62. What was the Advisory Opinion given by this Court in Natural
Resources Allocation? Among the questions referred for opinion were
D the following:
Question 1. Whether the only permissible method for disposal
of all natural resources across all sectors and in all circumstances
is by the conduct of auctions?

E Question 2. Whether a broad proposition of law that only the
route of auctions can be resorted to for disposal of natural
resources does not run contrary to several judgments of the
Supreme Court including those of the larger Benches?
63. In the Reference, it was submitted before the Constitution
F Bench that paragraphs 94 to 96 in CPIL laid down the ratio vis-à-vis
disposal of natural resources. It was argued that “these paragraphs lay
down, as a proposition of law, that all natural resources across all sectors,
and in all circumstances are to be disposed of by way of public auction,
and on the other [hand], it was urged that the observations therein were
made only qua spectrum.”
G
64. The submissions made by learned counsel were then discussed
and thereafter this Court recorded its conclusions between paragraphs
82 and 84 of Natural Resources Allocation. In paragraph 84, it was held:

18
(2014) 9 SCC 516
H 19
(2012) 10 SCC 1
THE GOA FOUNDATION v. M/S SESA STERLITE LTD. & ORS. 403
[MADAN B. LOKUR, J.]

“84. Thus, having come to the conclusion that 2G case20 does A
not deal with modes of allocation for natural resources,
other than spectrum, we shall now proceed to answer the
first question of the Reference pertaining to other natural
resources, as the question subsumes the essence of the entire
reference, particularly the set of first five questions.” [Emphasis
B
supplied by us].
65. Thereafter, while answering the first question in the Reference,
the Court considered the issue from various perspectives. It first dealt
with the issue in the context of Article 14 and Article 39(b) of the
Constitution and concluded in paragraph 120 of the Report that the
disposal of natural resources for revenue maximization through auctions C
is not a constitutional mandate. It was held:
“Therefore, in conclusion, the submission that the mandate of
Article 14 is that any disposal of a natural resource for commercial
use must be for revenue maximisation, and thus by auction, is
based neither on law nor on logic. There is no constitutional D
imperative in the matter of economic policies—Article 14
does not predefine any economic policy as a constitutional
mandate. Even the mandate of Article 39(b) imposes no
restrictions on the means adopted to subserve the public good
and uses the broad term “distribution”, suggesting that the E
methodology of distribution is not fixed. Economic logic
establishes that alienation/allocation of natural resources to the
highest bidder may not necessarily be the only way to subserve
the common good, and at times, may run counter to public good.
Hence, it needs little emphasis that disposal of all natural
resources through auctions is clearly not a constitutional F
mandate.” [Emphasis supplied by us].
66. The issue was then considered from the standpoint of legitimate
deviations from an auction. After adverting to several decisions of this
Court where auctions were not the favoured method of allocation of
natural resources, it was held between paragraphs 129 and 131 of the G
Report as follows:
“Hence, it is manifest that there is no constitutional mandate in
favour of auction under Article 14. The Government has
20
Centre for Public Interest Litigation v. Union of India (CPIL case or 2G scam case)
H
404 SUPREME COURT REPORTS [2018] 2 S.C.R.

A repeatedly deviated from the course of auction and this Court
has repeatedly upheld such actions. The judiciary tests such
deviations on the limited scope of arbitrariness and fairness under
Article 14 and its role is limited to that extent. Essentially,
whenever the object of policy is anything but revenue
maximisation, the executive is seen to adopt methods
B
other than auction.
A fortiori, besides legal logic, mandatory auction may be contrary
to economic logic as well. Different resources may require
different treatment. Very often, exploration and exploitation
contracts are bundled together due to the requirement of heavy
C capital in the discovery of natural resources. A concern would
risk undertaking such exploration and incur heavy costs
only if it was assured utilisation of the resource
discovered: a prudent business venture would not like to
incur the high costs involved in exploration activities and
D then compete for that resource in an open auction. The
logic is similar to that applied in patents. Firms are given incentives
to invest in research and development with the promise of
exclusive access to the market for the sale of that invention.
Such an approach is economically and legally sound and
sometimes necessary to spur research and development.
E Similarly, bundling exploration and exploitation contracts may be
necessary to spur growth in a specific industry.
Similar deviation from auction cannot be ruled out when the
object of a State policy is to promote domestic development of
an industry, like in Kasturi Lal case21 discussed above. However,
F these examples are purely illustrative in order to demonstrate
that auction cannot be the sole criterion for alienation of
all natural resources.” [Emphasis supplied by us].
67. Finally, the issue was considered from the point of view of the
potential of abuse in allocation of natural resources other than through
G auction and in this context it was held in paragraph 135 of the Report:
“Therefore, a potential for abuse cannot be the basis for striking
down a method as ultra vires the Constitution. It is the actual
abuse itself that must be brought before the court for being
21
H (1980) 4 SCC 1
THE GOA FOUNDATION v. M/S SESA STERLITE LTD. & ORS. 405
[MADAN B. LOKUR, J.]

tested on the anvil of constitutional provisions. In fact, it A
may be said that even auction has a potential of abuse, like any
other method of allocation, but that cannot be the basis of
declaring it as an unconstitutional methodology either. These
drawbacks include cartelisation, the “winner’s curse” (the
phenomenon by which a bidder bids a higher, unrealistic and
B
unexecutable price just to surpass the competition; or where a
bidder, in case of multiple auctions, bids for all the resources and
ends up winning licences for exploitation of more resources than
he can pragmatically execute), etc. However, all the same, auction
cannot be called ultra vires for the said reasons and continues to
be an attractive and preferred means of disposal of natural C
resources especially when revenue maximisation is a priority.
Therefore, neither auction, nor any other method of disposal
can be held ultra vires the Constitution, merely because
of a potential abuse.” [Emphasis supplied by us].
68. The conclusion arrived at by the Constitution Bench was then D
recorded between paragraphs 148 and 150 of the Report in the following
words:
“In our opinion, auction despite being a more preferable
method of alienation/allotment of natural resources, cannot
be held to be a constitutional requirement or limitation for E
alienation of all natural resources and therefore, every method
other than auction cannot be struck down as ultra vires the
constitutional mandate.
Regard being had to the aforesaid precepts, we have opined that
auction as a mode cannot be conferred the status of a F
constitutional principle. Alienation of natural resources is a
policy decision, and the means adopted for the same are
thus, executive prerogatives. However, when such a policy
decision is not backed by a social or welfare purpose, and
precious and scarce natural resources are alienated for
commercial pursuits of profit maximising private G
entrepreneurs, adoption of means other than those that
are competitive and maximise revenue may be arbitrary
and face the wrath of Article 14 of the Constitution. Hence,
rather than prescribing or proscribing a method, we believe, a
judicial scrutiny of methods of disposal of natural resources should H
406 SUPREME COURT REPORTS [2018] 2 S.C.R.

A depend on the facts and circumstances of each case, in
consonance with the principles which we have culled out above.
Failing which, the Court, in exercise of power of judicial review,
shall term the executive action as arbitrary, unfair, unreasonable
and capricious due to its antimony with Article 14 of the
Constitution.
B
In conclusion, our answer to the first set of five questions
is that auctions are not the only permissible method for
disposal of all natural resources across all sectors and in
all circumstances.” [Emphasis supplied by us].
C 69. It is therefore more than explicit that there is no constitutional
requirement (let alone a mandate) for allocation of natural resources
through the auction method (other than spectrum) but at the same time
the auction process should not be given a go-bye without any justification –
the decision to give a go-bye is judicially reviewable though the scope of
judicial review might be rather restricted. The melting pot of allocation
D of a natural resource, a social or welfare purpose and adherence to the
requirements of Articles 14 and 39(b) of the Constitution in matters of
policy was a great leap forward fashioned by the Constitution Bench.
Consequently, while there is no mandate, constitutional or otherwise,
that natural resource allocation must be only by auction, it is certainly “a
E more preferable method”. There are exceptions, such as when the natural
resource allocation is for a “social or welfare purpose”. On the other
hand if the natural resource allocation is “for commercial pursuits of
profit maximising private entrepreneurs” de hors any social or welfare
purpose, then judicial review would be permissible and Article 14 of the
Constitution would be attracted and if the executive action is found to be
F arbitrary, it would be struck down. Therefore, when it comes to natural
resource allocation, the executive has a somewhat limited elbow room.
70. In his concurring opinion, Justice Khehar took the view (in
paragraph 186 of the Report) that: “…when natural resources are made
available by the State to private persons for commercial exploitation
G exclusively for their individual gains, the State’s endeavour must be
towards maximisation of revenue returns.” [Emphasis supplied by us]
The learned judge concluded his opinion by agreeing that an auction is
one of the price recovery mechanisms, but not the only one for allocation
of natural resources. “That should not be understood to mean that it can
H never be a valid method for disposal of natural resources.” It was further
THE GOA FOUNDATION v. M/S SESA STERLITE LTD. & ORS. 407
[MADAN B. LOKUR, J.]

held that natural resources cannot be alienated by way of largesse – A
there must be a reciprocal consideration either in the form of earning
revenue or sub-serving the common good or both. The learned judge
had this to say:
“The policy of allocation of natural resources for public good
can be defined by the legislature, as has been discussed in the B
foregoing paragraphs. Likewise, policy for allocation of natural
resources may also be determined by the executive. The
parameters for determining the legality and constitutionality of
the two are exactly the same. In the aforesaid view of the matter,
there can be no doubt about the conclusion recorded in the main
opinion that auction which is just one of the several price recovery C
mechanisms, cannot be held to be the only constitutionally
recognised method for alienation of natural resources. That should
not be understood to mean that it can never be a valid method
for disposal of natural resources (refer to paras 186 to 188 of
my instant opinion). D
I would, therefore, conclude by stating that no part of the natural
resource can be dissipated as a matter of largesse, charity,
donation or endowment, for private exploitation. Each bit
of natural resource expended must bring back a reciprocal
consideration. The consideration may be in the nature of E
earning revenue or may be to “best subserve the common
good”. It may well be the amalgam of the two. There cannot
be a dissipation of material resources free of cost or at a
consideration lower than their actual worth. One set of
citizens cannot prosper at the cost of another set of citizens, for
that would not be fair or reasonable.” [Emphasis supplied by F
us].
71. This issue was considered in Goa Foundation as well. The
Court adverted to Natural Resources Allocation in paragraph 81 of
the Report and pithily expressed its view that the manner of granting a
mining lease is a policy decision of the State Government, but the decision G
can be examined by way of judicial review. It was held:
“We are of the considered opinion that it is for the State
Government to decide as a matter of policy in what manner the
leases of these mineral resources would be granted, but this
decision has to be taken in accordance with the provisions of the H
408 SUPREME COURT REPORTS [2018] 2 S.C.R.

A MMDR Act and the Rules made thereunder and in consonance
with the constitutional provisions and the decision taken by the
State of Goa to grant a mining lease in a particular manner or to
a particular party can be examined by way of judicial review by
the Court.” [Emphasis supplied by us].
B It was then declared in paragraph 87.5 of the Report that:
“It is for the State Government to decide as a matter of policy in
what manner mining leases are to be granted in future but the
constitutionality or legality of the decision of the State
Government can be examined by the Court in exercise of
C its power of judicial review.” [Emphasis supplied by us].
Similarly, in Manohar Lal Sharma this Court adverted to the
issue and noted the following in paragraph 98 of the Report:
“The Constitution Bench [Natural Resources Allocation]
clarified that the statement of law in 2G case [CPIL] that while
D transferring or alienating the natural resources, the State is duty-
bound to adopt the method of auction was confined to the specific
case of spectrum and not for dispensation of all natural resources.
The Constitution Bench said that findings of this Court in 2G
case were limited to the case of spectrum and not beyond that
and that it did not deal with the modes of allocation for natural
E resources other than spectrum.”
The Court also referred to the views expressed by Justice Khehar
and held, in paragraph 104 of the Report:
“In light of the above legal position, the argument that auction is
the best way to select private parties as per Article 39(b) does
F not merit acceptance.”
72. This Court then exercised its power of judicial review and
considered the merits of the explanation given by the Central Government
for not adopting the competitive bidding route for the allocation of coal
blocks. The various submissions made, the various hurdles faced
G (including objections of the State Governments) as well as the
impracticality of opening up the allocation of coal blocks to competitive
bidding were considered and then it was held (after opening the window
of Article 14 of the Constitution) in paragraph 110 of the Report:
“The above facts show that it took almost 8 years in putting in
H place allocation of captive coal blocks through competitive
THE GOA FOUNDATION v. M/S SESA STERLITE LTD. & ORS. 409
[MADAN B. LOKUR, J.]

bidding. During this period, many coal blocks were allocated giving A
rise to present controversy, which was avoidable because
competitive bidding would have brought in transparency,
objectivity and very importantly given a level playing field to all
applicants of coal and lowered the difference between the market
price of coal and the cost of coal for the allottee by way of
B
premium which would have accrued to the Government. Be that
as it may, once it is laid down by the Constitution Bench of this
Court in Natural Resources Allocation that the Court cannot
conduct a comparative study of various methods of distribution
of natural resources and cannot mandate one method to be
followed in all facts and circumstances, then if the grave situation C
of shortage of power prevailing at that time necessitated private
participation and the Government felt that it would have been
impractical and unrealistic to allocate coal blocks through auction
and later on in 2004 or so there was serious opposition by many
State Governments to bidding system, and the Government did
D
not pursue competitive bidding/public auction route, then in our
view, the administrative decision of the Government not to pursue
competitive bidding cannot be said to be so arbitrary or
unreasonable warranting judicial interference. It is not the domain
of the Court to evaluate the advantages of competitive bidding
vis-à-vis other methods of distribution/disposal of natural E
resources. However, if the allocation of subject coal blocks
is inconsistent with Article 14 of the Constitution and the
procedure that has been followed in such allocation is found
to be unfair, unreasonable, discriminatory, non-transparent,
capricious or suffers from favouritism or nepotism and
F
violative of the mandate of Article 14 of the Constitution,
the consequences of such unconstitutional or illegal
allocation must follow.” [Emphasis supplied by us].
73. More recently in M/s. Ajar Enterprises Private Limited v.
Satyanarayan Somani22 this Court once again examined the issue of
distribution of natural resources and held: G

“Undoubtedly, disposal of natural resources by auction is not a
mandatory principle for, as the Constitution Bench held,23
22
2017 (10) SCALE 346
23
Natural Resource Allocation H
410 SUPREME COURT REPORTS [2018] 2 S.C.R.

A individual statutes may provide for modalities of transfer by
alternate modes which subserve public interest. ….. The choice
of methods is not left to the unbridled discretion of a public
authority. Where a public authority exercises an executive
prerogative, it must nonetheless act in a manner which would
subserve public interest and facilitate the distribution of
B
scarce natural resources in a manner that would achieve
public good. Where a public authority implements a policy, which
is backed by a constitutionally recognised social purpose intended
to achieve the welfare of the community, the considerations which
would govern would be different from those when it alienates
C natural resources for commercial exploitation. When a public
body is actuated by a constitutional purpose embodied in the
Directive Principles, the considerations which weigh with it in
determining the mode of alienation should be such as would
achieve the underlying object. In certain cases, the dominant
consideration is not to maximize revenues but to achieve
D
social good such as when the alienation is to provide
affordable housing to members of the Scheduled Castes
or Tribes or to implement housing schemes for Below the
Poverty Line (BPL) families. In other cases where natural
resources are alienated for commercial exploitation, a
E public authority cannot allow them to be dissipated at its
unbridled discretion at the cost of public interest.”
[Emphasis supplied by us].
The window is now more than ajar.
74. Till fairly recently, policy matters particularly of economic
F policy were hands-off as far as the courts were concerned.24 But the
recent decisions of this Court, including by the Constitution Bench in its
advisory jurisdiction, have partially modified this theory and kept open
the window to judicially review such a policy if it does not serve the
common good as understood in Article 39(b) of the Constitution, if it
G violates Article 14 of the Constitution and alienates natural resources for
maximizing profits of private entrepreneurs while sidelining Article 39(b)
of the Constitution. “The legislature and the executive are answerable
to the Constitution and it is there where the judiciary, the guardian of the
24
BALCO Employees’ Union (Regd) v. Union of India, (2002) 2 SCC 333 at paragraphs
46 and 47
H
THE GOA FOUNDATION v. M/S SESA STERLITE LTD. & ORS. 411
[MADAN B. LOKUR, J.]

Constitution, must find the contours to the powers of disposal of natural A
resources, especially Article 14 and Article 39(b) [of the Constitution].25
75. Notwithstanding this, a Court must exercise restraint and not
set aside Government policy only because it disagrees with it or because
a better policy could be framed or simply because it has the power to set
aside the policy. Policies framed by the State, after due consideration, B
must be respected and given enough elbow room and flexibility for
implementation. Of course, there would be occasions when the
implementation of a policy has teething problems or some lacuna is
discovered at a slightly later stage, but that does not mean that policy
itself is defective. Therefore, Courts must be very cautious and
circumspect in diluting or setting aside a policy and must do so only if it C
is constitutionally unavoidable, otherwise good governance could be a
casualty.
76. The conclusions that could be drawn from all these decisions
are: (i) It is not obligatory, constitutionally or otherwise, that a natural
resource (other than spectrum) must be disposed of or alienated or D
allocated only through an auction or through competitive bidding; (ii)
Where the distribution, allocation, alienation or disposal of a natural
resource is to a private party for a commercial pursuit of maximizing
profits, then an auction is a more preferable method of such allotment;
(iii) A decision to not auction a natural resource is liable to challenge and E
subject to restricted and limited judicial review under Article 14 of the
Constitution; (iv) A decision to not auction a natural resource and sacrifice
maximization of revenues might be justifiable if the decision is taken,
inter alia, for the social good or the public good or the common good;
(v) Unless the alienation or disposal of a natural resource is for the
common good or a social or welfare purpose, it cannot be dissipated in F
favour of a private entrepreneur virtually free of cost or for a
consideration not commensurate with its worth without attracting Article
14 and Article 39(b) of the Constitution.
Whether the decision of the State of Goa forsaking the auction
route is arbitrary? G
77. Keeping in mind the broad principles identified above, the
question that arises for our consideration is whether the State of Goa
was justified in not adopting the auction route for the grant of mining
25
Paragraph 95 of the Natural Resource Allocation decision
H
412 SUPREME COURT REPORTS [2018] 2 S.C.R.

A leases and simply granting a second renewal. For a better understanding
of this issue, it would be worthwhile to again refer to the Goa Mineral
Policy, the report of the EAC, the Grant of Mining Leases Policy and
the decision of the Bombay High Court, which documents were relied
upon by the learned Additional Solicitor General.
B (i) Goa Mineral Policy
78. The Mineral Policy makes it very clear that during the period
from about 2006 till about 2012 (for about 5 years) extraction of iron ore
in Goa was nothing but a free-for-all situation. Illegalities and irregularities
were committed in abundance by all concerned, particularly the mining
C lease holders. The Mineral Policy records that the State witnessed the
peak of chaotic and unregulated mining. The thought of protecting and
preserving the environment, concern for the fragile ecology of Goa was
far from the thoughts of the stakeholders – even the well-being of the
average Goan was not taken into consideration by the stakeholders. A
reading of the initial paragraphs of the Mineral Policy suggests that nothing
D short of rapacious mining was going on in Goa. Who were the beneficiaries
of all this rapaciousness? Could all this be ignored?
79. The Mineral Policy informs us that the beneficiaries of the
rapaciousness were not the domestic industry and certainly not the
average Goan. The reason for this is spelt out in the Mineral Policy
E itself. Iron ore from Goa is not suitable for the Indian industry due to the
low Fe content and the high silica presence. Therefore, there is no value
addition to the Indian industry and the iron ore was mined only for export
– mainly to China and also to Japan. With a port in the vicinity, Goan iron
ore was an attractive buy for the global market and the spin-offs benefited
F those in the port, transporters and barge owners etc. The primary
beneficiary of this was, of course, the mining lease holder, a private
entity, and the price was paid by the average Goan who had to suffer a
polluted environment and witness the damage to the State’s ecology.
80. If the issues mentioned in the Mineral Policy are objectively
G considered in strict monetary terms, the only conclusion that can be
drawn is that the extraction of iron ore was for commercial purposes
and maximizing the revenues of private entrepreneurs and not necessarily
the State of Goa. The natural resource was exploited by some mining
lease holders for making profits and nothing else. There were some
collateral beneficiaries as well, and they too were commercially driven
H entities such as barge owners, truck owners etc. Under these
THE GOA FOUNDATION v. M/S SESA STERLITE LTD. & ORS. 413
[MADAN B. LOKUR, J.]

circumstances, the question that arises is whether the mining lease holders A
should have been given a second renewal of the mining lease virtually
for a song, that is, payment only of royalty, when they were driven only
by a profit motive or whether the mining leases ought to have been
auctioned? Unfortunately, the Mineral Policy did not advert to or even
consider any solution that would break from the past.
B
81. As far as the environment, the fragile ecology of Goa and the
well-being of the average Goan and the rule of law is concerned, the
Mineral Policy categorically states that the State had witnessed, from
2006-07 till 2011-12 the peak of chaotic and unregulated mining without
any concern for the fragile ecology and environment of the State or for
the general well-being of an average Goan. Surely, all this cannot be C
ignored or brushed aside particularly since the exploitation of mineral
resources for five years had no element of social or public purpose, no
concern for society and no regard for the environment and the laws.
(ii) Vishwanath Anand Expert Appraisal Committee
D
82. A reading of the report of the EAC is disturbing and acutely
highlights the damage to the environment and ecology by the mining
lease holders. The complete indifference by all concerned is evident
from a careful reading of the report. We propose to refer to and quote in
extenso the ‘summary of observations’ and the ‘concluding remarks’
from the report of the EAC since they are self explanatory: E

“Sum mary of Observations
I. The absence of specific conditions highlighting the
mandatory requirement to obtain prior approval of the
Standing Committee of the NBWL [National Board for Wild F
Life] in the EC [Environmental Clearance] has led to
misinterpretation of the legal requirement. There has been
an inordinate delay of more than 5 years before effective
action against defaulting units were initiated by the Ministry
for non-compliance of the Hon’ble Supreme Court order
dated 04.12.2006. G
II. Out of 137 ECs, the requirement of obtaining approval of
the Standing Committee of the NBWL under the W.L. (P)
Act 1972 [Wild Life (Protection) Act] has not been complied
with in 123 cases where the distances are less than 10 km
from the nearest PA [Protected Area]. H
414 SUPREME COURT REPORTS [2018] 2 S.C.R.

A III. In respect of 10 cases approval of the Standing Committee
of the NBWL is not mandatory as the mine leases are
located beyond 10 km from nearest PA.
IV. Contrary to the directions of the Hon’ble Supreme Court
dated 04.08.2006 in Writ Petition (Civil) No. 202/1995; ECs
B have been accorded to 41 mines located within 1 km from
the nearest PA.
V. In respect of 20 cases mine leases were renewed under
MMDR Act, 1957 prior to grant of FCs [Forest Clearance].
VI. In 29 cases, project proponents have furnished wrong
C information about distance from the nearest PAs.
VII. Non-compliance of various EC conditions such as excess
production/unauthorized dump mining/drawal of ground
water without prior approval of CGWB/encroachment; have
also been reported in respect of working mines.
D
Concluding Remarks
A reading of our observations and recommendations would show
that without exception, every proponent to whom an
environment clearance was issued has either violated its
conditions or has furnished information in the application
E
which has been distant from the truth. There are basically two
types of violations; one that cannot be legally condoned and those
that can be rectified with remedial measures. This is the reason
why the committee has recommended that all ECs for mines
located within one km from PAs should be revoked and in cases
F where untruthful information was furnished in the application
for EC, such mines should not be allowed to reopen. In the case
of those mines which have been closed for more than five years,
their reopening has not been recommended without their applying
de novo for a fresh environmental clearance as micro
environmental conditions on the ground would have changed
G
during the period they remained closed. However, when one
looks at the manner in which the directives dated 04.08.2006
and 04.12.2006 of the Supreme Court have been implemented
one cannot help but feel that there is the absence
of a bridge mechanism within the Ministry to ensure and oversee that
H directives of the Courts are complied with due diligence and seriousness.
THE GOA FOUNDATION v. M/S SESA STERLITE LTD. & ORS. 415
[MADAN B. LOKUR, J.]

There are two factors which stand out; in some ECs as mentioned A
in this report, the condition was inserted that the project proponent
should seek approval of the CWLW [Chief Wild Life Warden],
in others it was stated that approval of the Competent Authority/
Standing Committee of the NBWL should be obtained and in a
third category no condition at all was imposed, even though some
B
of these ECs pertain to the same meeting and timelines between
2005 and 2007. It is strange that concerned officials in the MOEF
were not aware that other than the Standing Committee of the
NBWL no other person was authorised to grant the permission
envisaged by the order dated 04.12.2006 of the Supreme Court.
This is not to state that any discrepancy in the EC letter would C
absolve the project proponent from complying with the law of
the land. This has resulted in creating ambiguity amongst many
of the project proponents and it was not until 01.01.2009, that
the MOEF issued a public notice clarifying the position.
Considering that some of the project proponents may have been D
misguided by the ambivalence of the MOEF in not clearly
delineating the legal position, it is suggested that in the case of
those project proponents who did not conceal facts in their
applications but did not apply for permission to the Standing
Committee of the NBWL, their applications may be considered
for being placed before the Standing Committee of the NBWL. E
However this can in no way be construed as a justification on
the part of the project proponents for not complying with the
requirements of the law. It must be noted for example that in
those cases where mining has intersected the ground water,
approval of the CGWB [Central Ground Water Board] had not F
been taken by the project proponents as was required by the
EC. Similarly, there are cases where mining operations have
taken place without obtaining a FC.
…….
As regards violations of the conditions of the ECs and where G
environmental damage has been caused, the concerned
proponents should be made accountable and the MOEF should
examine as to how some monetary damages can be levied through
due legal process based on the Polluter Must Pay principle, the
proceeds of which could be used for environmental rehabilitation. H
416 SUPREME COURT REPORTS [2018] 2 S.C.R.

A There are concerns about the carrying capacity of the area with
regard to its ability to sustain the extent and quantum of mining
that has taken place there. It is recommended that a carrying
capacity study should be commissioned for the area, or if another
study by a nationally recognised institution is coming to fruition
the result of that should be acted upon. Such a study should also
B
take into account the impact of mining on the hydrology of the
region and the extent of pollution caused to surface and ground
water. This study should be compared to the earlier 10 years
baseline data to determine the impact of mining on the biodiversity
and hydrology of the area in the last decade. Based on the
C finding of this, a specific policy for mining of iron ore in the
region may be developed. Such a policy along with a proper
control and monitoring mechanism is necessary in order to avoid
a situation such as the one under question. It would hopefully
also ensure that mining in this region is carried out in accordance
with best sectoral practices using appropriately clean
D
technologies.” [Emphasis supplied by us].
83. The report of the EAC reveals that there is not a single
environment related or mining related law or legal requirement that was
not violated by one or the other mining lease holder. Quite clearly, the
rule of environmental law in Goa had gone with the wind.
E
84. There was one extremely important requirement relating to
extraction of groundwater – that is clearance from the Central Ground
Water Board - but even that was ignored. During the course of
submissions, we were informed that there is plenty of groundwater
available in Goa. However, what seems to have been overlooked is that
F with the intersection of groundwater levels with mining operations, the
groundwater would get depleted much faster than expected or the quality
of the groundwater would deteriorate. It is for this reason that MoEF
insisted that clearance for drawal of groundwater must be taken from
the Central Ground Water Board and care taken in respect of the
G intersection of groundwater level with mining operations (this happened
in 46 cases). Unfortunately, no heed was paid to these requirements by
the State of Goa or any of the mining lease holders and not one mining
least holder has any clearance (where required) from the Central Ground
Water Board, or at least none was brought to our notice.

H
THE GOA FOUNDATION v. M/S SESA STERLITE LTD. & ORS. 417
[MADAN B. LOKUR, J.]

(iii) Decision of the Bombay High Court A
85. The High Court essentially created two classes of applicants
for the grant of a mining lease – those in whose favour an in-principle
decision had been taken for a second renewal of the mining lease and
who had paid the necessary stamp duty in terms of the Government
order of 21st February, 2013 and those who had not yet paid the requisite B
stamp duty.
86. As regards the first category, the High Court directed execution
of the mining lease in their favour in accordance with the provisions of
Section 8(3) of the MMDR Act. This was on the belief that the applicants
had applied for the second renewal within the prescribed time period; C
the Indian Bureau of Mines had approved the mining plans of these
applicants; the Indian Bureau of Mines was subjectively satisfied that
the second renewal was in the interest of mineral development; and that
in view of the principles of promissory estoppel these applicants were
entitled to a second renewal of their mining lease since they had altered
their position to their detriment by paying the stamp duty demanded. D

87. As regards the second category (those who had not paid the
stamp duty), the High Court directed the State of Goa to decide their
second renewal application within a period of three months keeping in
mind the provisions of Section 8(3) of the MMDR Act (and the
requirement to pay the stamp duty). E

88. The decision of the High Court does not at all discuss the options
available to the State of Goa, namely, second renewal of the mining
leases versus auction of a natural resource. In fact it appears that the
High Court was not at all alive to the possibility of an auction of the
mining leases, notwithstanding the view canvassed by the learned F
Advocate General of the State of Goa.
(iv) Goa Grant of Mining Leases Policy 2014
89. The Grant of Mining Leases Policy announced and issued on
4th November, 2014 is perhaps the most important document in the entire
G
scheme of things and that is the reason it was read out extensively by
the learned Additional Solicitor General and that is why we have chosen
to quote it extensively.
90. A consideration of the contemporaneous facts beginning with
the Budget Speech given by the Hon’ble Minister of Finance of the
H
418 SUPREME COURT REPORTS [2018] 2 S.C.R.

A Government of India on 10th July, 2014 makes it clear that an amendment
to the MMDR Act was to be effected sooner than later. The Grant of
Mining Leases Policy overlooks that and proceeds on the basis that the
judgment of the High Court delivered on 13th August, 2014 left the
Government of Goa with no choice but to abandon the grant of mining
leases through competitive bidding, even though that might be the most
B
appropriate method of obtaining the best revenue for the public good.
The Government of Goa had therefore “for the present” ruled out the
process of going in for competitive bidding keeping also in mind that the
State was virtually starved of funds and had to balance the equities and
needs of all, including the labour class, working class and other staff,
C markets in mining localities, public sector, mining lease holders, welfare
needs of the State, environment and fragile ecology of the State and
general well-being of the average Goan.
91. The State of Goa was also alive to the fact that many (if not
all) mining lease holders had violated the terms of the mining lease or
D some statutory obligation. Therefore, it was decided to categorize the
offenders as follows:
Category I – will be those Mining Leases which have no
violations or very minimal violation of any provision / condition
of applicable laws/rules orders/permissions etc. or those which
E cannot otherwise be referred to as ‘violations’.
Category II – are those Mining Leases which have been found
to have violated the Provisions of the Mineral Concession Rules
including Rules 37 and 38 and other matters as mentioned in the
Public Accounts Committee Report/Justice Shah Commission
Report. In this category, the State Government will consider each
F of the cases on its own merits; and wherever the violations are
noticed subject to the same being remedied by paying appropriate
Penalty/Fines including those of forfeiture, the State Government
shall pass appropriate Orders in accordance with Law.
Category III – Mining leases will be those which are found to
G have violated substantially any provision / condition of applicable
laws / rules/orders/permissions etc., and in which cases the State
Government shall determine the Lease/reject their ‘Application
for the Second Renewal’.
92. The offences ranged, amongst others, from illegal sale of ore,
H sale of royalty challan without ore, encroachment of adjoining areas
THE GOA FOUNDATION v. M/S SESA STERLITE LTD. & ORS. 419
[MADAN B. LOKUR, J.]

outside the lease, over production in excess of the limit specified in the A
environmental clearance, unscientific mining operations, violations with
respect to payment of royalty amount, re-use of old royalty challans for
defrauding, illegal mining activities etc. etc. None of these are ‘minimal’
violations. However, and this is important, the Grant of Mining Leases
Policy made it clear that the following shall not be considered for renewal
B
of mining leases: (i) Those facing an inquiry initiated pursuant to the
orders of this Court in paragraph 88.2 of Goa Foundation for the violation
of Rules 37 and 38 of the Mineral Concession Rules, 1960; (ii) Those
indicted by the Justice M.B. Shah Commission; and (iii) Those indicted
by the Public Accounts Committee. The Grant of Mining Leases Policy
stated that inquiries are already in progress “at various levels and foras” C
including a Special Investigation Team and a team of Chartered
Accountants. We dare say that violations pointed out by the EAC ought
also to have been taken into consideration.
93. Be that as it may, there is no doubt that iron ore mining in Goa
was solely for commercial purposes – it was extracted primarily for D
export to China and Japan without any value addition to the domestic
industry. True this brought in considerable foreign exchange –
nevertheless iron ore extraction gave insignificant value addition (if at
all) to Indian industry. The only advantage that iron ore extraction gave
to the State was in terms of royalty, but the larger benefit accrued to the
private mining lease holder who could obtain a mining lease on renewal E
virtually free and without any social or welfare purpose. In other words,
the State sacrificed maximizing revenue for no apparent positive reason,
virtually surrendering itself to the commercial and profit making motives
of private entrepreneurs and ignoring the interests of Goan society in
general. Therefore, in principle, the decision of the State of Goa to not F
auction the grant of mining leases was flawed in that it did not serve the
common or public or social good but primarily assisted in filling the coffers
of private entrepreneurs. We are not inclined to go so far as to describe
the decision as arbitrary since it is not necessary to do so.
94. However, we make it clear that we have dealt with this issue G
because it was canvassed before us. We are not inclined to quash the
decision of the State of Goa of not going in for competitive bidding for
the grant of fresh mining leases since it is not necessary in view of our
conclusion that fresh mining leases were required to be granted by the
State of Goa.
H
420 SUPREME COURT REPORTS [2018] 2 S.C.R.

A 95. At this stage we must refer to a submission made by Mr.
C.U. Singh learned counsel appearing for some of the mining lease
holders. He submitted that prior to 12th January, 2015 the MMDR Act
did not permit the auction of mining leases. Therefore, even if the State
of Goa was desirous of introducing competitive bidding for grant of fresh
mining leases it could not have done so. He drew our attention to Section
B
11 of the MMDR Act (as it stood prior to its amendment in 2015) which
provided a preferential right for obtaining a prospecting license or mining
lease to the holder of a reconnaissance permit or prospecting license.
He submitted, placing reliance on Sandur Manganese and Iron Ores
Limited v. State of Karnataka26 that since the MMDR Act is a complete
C code in itself, the method or procedure for grant of a lease cannot travel
outside the confines of the statute and the Mineral Concession Rules,
1960 framed thereunder. Reference was made to paragraphs 40 to 43
of the judgment:
“In view of the specific parliamentary declaration as discussed
D and explained by this Court in various decisions, there is no
question of the State having any power to frame a policy dehors
the MMDR Act and the Rules.
In State of Assam v. Om Prakash Mehta27 this Court in SCC
para 12 held that the MMDR Act, 1957 and the MC Rules, 1960
E contain a complete code in respect of the grant and renewal of
prospecting licences as well as mining leases in lands belonging
to the Government as well as lands belonging to private persons.
Again this Court in Quarry Owners’ Assn. v. State of
Bihar28 held that both the Central and the State Government act
F as mere delegates of Parliament while exercising powers under
the MMDR Act and the MC Rules.
It is not open to the State Government to justify grant
based on criteria that are dehors the MMDR Act and the
MC Rules. The exercise has to be done strictly in
G accordance with the statutory provisions and if there is
any deviation, the same cannot be sustained. It is the normal
rule of construction that when a statute vests certain power in
an authority to be exercised in a particular manner then the said
26
(2010) 13 SCC 1
27
(1973) 1 SCC 584
H 28
(2000) 8 SCC 655
THE GOA FOUNDATION v. M/S SESA STERLITE LTD. & ORS. 421
[MADAN B. LOKUR, J.]

authority has to exercise it only in the manner provided in the A
statute itself. This principle has been reiterated in CIT v. Anjum
M.H. Ghaswala29 SCC at p.644; Captain Sube Singh v. Lt.
Governor of Delhi30 and State of U.P. v. Singhara Singh.31"
[Emphasis supplied by us].
Reference may also be made to paragraph 44 of the Report that reads B
thus:
“Mr. Harish N. Salve and Mr. Dushyant Dave, by drawing our
attention to the decision of this Court in TISCO Ltd. v. Union of
India [(1996) 9 SCC 709] , submitted that inasmuch as this Court
had upheld the grants based on “captive consumption”, there is C
no flaw or error in the recommendation of the State Government
dated 6-12-2004. A perusal of the above decision clearly shows
that it concerned with Section 8(3) of the MMDR Act which
requires consideration of the extremely general criterion of the
interests of mineral development before granting second renewal
of a mining lease. Unlike in Section 11(3), no further criteria D
were specified and it was in this background, this Court upheld
on the facts of that case that relevant material taken into account
by the Committee set up by the Central Government rightly
included “captive consumption”. In view of the factual situation,
the said decision can have no bearing on initial grants of mining E
lease where the only permissible criteria are the matters set out
in Section 11(3) of the MMDR Act.”
96. The controversy in Sandur Manganese related to the grant
of mining leases contrary to the provisions of Section 11 of the
MMDR Act in that a non-statutory criterion was taken into F
consideration de hors Section 11 of the MMDR Act for
evaluating the applications and seeking approval of the Central
Government for granting a mining lease. This was held to be
impermissible and it may be so. In any event, paragraph 44 of
the Report makes it clear that there is a distinction between the
requirements of Section 11(3) of the MMDR Act and Section G
8(3) of the MMDR Act. Sandur Manganese is not applicable
to the facts of the present case.
29
(2002) 1 SCC 633
30
(2004) 6 SCC 440
31
(1964) 4 SCR 485 H
422 SUPREME COURT REPORTS [2018] 2 S.C.R.

A 97. Similarly, reference was made to the Statement of Objects
and Reasons for the Bill introduced in 2015 to amend the MMDR Act. It
was stated therein that “The present legal framework of the MMDR
Act, 1957, does not permit the auctioning of mineral concessions.”
98. This submission need not detain us since we are not required
B to adjudicate whether the State of Goa should have auctioned the mining
leases or not. The State of Goa decided to renew the mining leases and
we are only called upon to decide (i) Whether the policy decision not to
auction the grant of mining leases was arbitrary (we have already held
that we are not required to express a final opinion on this). We may,
however, recall en passant that the Goa Grant of Mining Leases Policy
C proceeded on the basis that the auction of mining leases was permissible
and that had the sanction of the Court in Goa Foundation. It may be
added that the MMDR Act did not prohibit the auction of mining leases.
(ii) Whether the second renewals were in accordance with law and the
constitutional principles.
D 99. We may also note that the Constitution Bench in Natural
Resources Allocation referred to the submission that if auction were
the only method of allocating natural resources (as it appears from CPIL)
then the mandate would create a conflict with some statutes including
the MMDR Act. The Constitution Bench dealt with this submission in
E paragraph 83 of the Report by observing:
“Moreover, if the judgment in 2G case32 is to be read as holding
auction as the only permissible means of disposal of all natural
resources, it would lead to the quashing of a large number of
laws that prescribe methods other than auction e.g. the MMDR Act.”
F However, the Constitution Bench did not advert to the consequence vis-
à-vis the MMDR Act of holding that auction was not mandated as the
only method of allocating a natural resource. Since the question does not
arise in these cases, we decline to go into this issue – we need not finally
adjudicate whether the State of Goa should have auctioned the mining
G leases but we are called upon to decide whether the grant of second
renewals was valid in law.
Judicial review of renewals
100. In view of decisions of this Court, including in Natural
Resources Allocation it is permissible for this Court to judicially review,
H 32
(2012) 3 SCC 1
THE GOA FOUNDATION v. M/S SESA STERLITE LTD. & ORS. 423
[MADAN B. LOKUR, J.]

to a limited and restricted extent, the Grant of Mining Leases Policy, A
among other things, if it falls foul of Article 14 read with Article 39(b) of
the Constitution and if it ignores the common or public or social good but
benefits private entrepreneurs, particularly when it involves the natural
resources, by sacrificing the maximization of revenue for the State.
101. In Natural Resources Allocation the Constitution Bench B
observed that “Alienation of natural resources is a policy decision, and
the means adopted for the same are thus, executive prerogatives.
However, when such a policy decision is not backed by a social or welfare
purpose, and precious and scarce natural resources are alienated for
commercial pursuits of profit maximising private entrepreneurs, adoption
of means other than those that are competitive and maximise revenue C
may be arbitrary and face the wrath of Article 14 of the Constitution.”
102. Similarly in Goa Foundation this Court declared that “It is
for the State Government to decide as a matter of policy in what manner
mining leases are to be granted in future but the constitutionality or legality
of the decision of the State Government can be examined by the Court D
in exercise of its power of judicial review.”
103. Despite the dicta of the Constitution Bench and the declaration
made by this Court in Goa Foundation we do not propose to judicially
review the Grant of Mining Leases Policy but to consider on merits
whether the grant of second renewal to the mining leases was in E
accordance with the Grant of Mining Leases Policy and the law.
104. In our opinion, in renewing the mining leases, the State of
Goa completely ignored several relevant and important and significant
factors giving the impression that the renewals were not quite fair or
reasonable. F
105. For one, the State ignored the fact that every single mining
lease holder had committed some illegality or the other in varying degrees.
To identify these illegalities (although they had already been identified
by the Justice Shah Commission and by the EAC), a Special Investigation
Team had been set up as also a team of Chartered Accountants. Instead G
of waiting for a report from any one of these teams, the State acted in
violation of the Grant of Mining Leases Policy and renewed the mining
leases. Why was the report from the Special Investigation Team not
awaited or called for and examined? In the Grant of Mining Leases
Policy it was clearly and explicitly stated (as mentioned above) as follows:
H
424 SUPREME COURT REPORTS [2018] 2 S.C.R.

A “Unless and until the Inquiry initiated pursuant to the Judgment
and Order of the Hon’ble Supreme Court of India against those
Mine Lease Holders found to be violating either Rule 37 or Rule
38 of the Mineral Concession Rules, 1960, or otherwise indicated
in the Report of the Justice Shah Commission/PAC report or
found to be engaged in, any kind of illegality of whatsoever nature
B
such as illegal Sale of Ore, Sale of Royalty Challan without Ore,
Encroachment of adjoining areas outside the lease over production
in excess of the limit specified in the Environmental Clearance;
those which have undertaken unscientific mining operations;
those who have violated or have not paid the Royalty amount;
C those who have re-used old Royalty Challans for defrauding;
and those involved in Illegal Mining Activities shall not be
considered for renewal of the Mining Leases.
For this purpose, presently the inquiries are in progress at various
levels and foras including the investigation by the SIT Team, by
D the Team of Chartered Accountants which have been set up by
the State Government and after the inquiry is complete or
during the course of the inquiry where it is found that any
violations have taken place, such persons shall not be
considered for Grant/Renewal of the Leases.” [Emphasis
supplied by us].
E 106. Unfortunately, the undue haste in which the State acted gives
the impression that it was willing to sacrifice the rule of law for the
benefit of the mining lease holders and the explanation of satisfying the
needs of some sections of society for their livelihood (after keeping them
in the lurch for more than two years) was a mere fig leaf. The real
F intention of the second renewal was to satisfy the avariciousness of the
mining lease holders who were motivated by profits to be made through
the exploitation of natural resources.
107. The undue haste also needs to be looked at in the context of
the statement made in the final paragraph of the Grant of Mining Leases
G Policy to the effect that this Policy is an in-principle decision and would
be notified after it is vetted for legal requirements “from specific
necessities as also from financial view points”. In other words, the Grant
of Mining Leases Policy as published on 4th November, 2014 was not a
final policy statement but only an intent that would take final shape after
due vetting. The Grant of Mining Leases Policy was eventually published
H on 20th January, 2015 but it was acted upon even before it was gazetted.
THE GOA FOUNDATION v. M/S SESA STERLITE LTD. & ORS. 425
[MADAN B. LOKUR, J.]

108. A partial explanation for this hurry, if we may venture to A
suggest, is that the State of Goa was aware (like everybody else) on 17th
November, 2014 if not earlier, of the policy of the Government of India
to auction the grant of mining leases which policy was made available in
the public domain on that date and suggestions invited. It is on 17th
November, 2014 that the draft Mines and Minerals (Development and
B
Regulation) Act, 2014 was published on the website of the Ministry of
Mines of the Government of India. The policy of the Government of
India proposed to introduce Section 10B by way of an amendment to the
MMDR Act and the proposed amendment made it very clear that if it
were to be accepted, auction of mining leases in respect of notified
minerals (including iron ore) would become a reality if not an obligation. C
It appears that to circumvent this rather uncomfortable policy, the State
pressed the accelerator on the renewal of mining leases from December
2014 onward to benefit mining lease holders. So much so that in respect
of 5 mining leases, the State overstepped the law and granted a second
renewal in early January 2015 to some entities without even waiting for
D
any approval or deemed approval of the mining plan from the Indian
Bureau of Mines or any other authority.
109. This sequence of events acquires further significance when
it is recalled that an Ordinance to amend the MMDR Act was made
known to the general public on 5th January, 2015 and promulgated by the
President on 12th January, 2015 thereby mandating competitive bidding E
or auction for the grant of mining leases. The State of Goa perhaps
anticipated this in view of the publication of the draft Mines and Minerals
(Development and Regulation) Act, 2014 and therefore hurried into the
second renewal of mining leases (notwithstanding the Grant of Mining
Leases Policy) to defeat the introduction of the auction process. In fact F
in the period from 5th January, 2015 to 12th January, 2015 the Government
of Goa granted a second renewal to as many as 56 mining leases and
from 17th November, 2014 the State of Goa granted a second renewal to
as many as 75 mining leases. The sudden spurt of renewal of mining
leases is beyond comprehension. The judgment and order of the High
Court in Lithoferro cannot be used as a shield for explaining the haste. G

110. These facts must also be appreciated in the context that mining
operations were suspended in Goa with effect from 10th September,
2012 due to an order passed by the State of Goa. Therefore, mining
operations having been suspended for more than two years, the State
H
426 SUPREME COURT REPORTS [2018] 2 S.C.R.

A could have certainly waited for a few weeks more and taken an informed
and reasoned decision on granting a second renewal to mining leases –
but waiting for a few weeks could have led to an uncomfortable situation
that would have compelled the State of Goa to auction the mining leases,
hence the haste.
B 111. This Court held in Tata Iron & Steel Co. Ltd. v. Union of
India33 that for the purposes of Section 8(3) of the MMDR Act34 the
concept of ‘mineral development’ encompasses the concept of captive
mining, an assessment of its requirement by different industries as well
as the principle of equitable distribution (under Article 39(b) of the
Constitution). It is not at all clear from the records before us that the
C State had applied its mind to these and other factors including the report
of Justice Shah, the report of the EAC, the absence of any value addition
to the domestic industry and the degradation of the environment as noted
by the Expert Committee appointed by this Court in concluding that a
second renewal was ‘in the interests of mineral development’. Mere
D reliance on the acceptance or deemed acceptance of the Indian Bureau
of Mines is not enough, as imagined by the State of Goa. The matter of
‘interests of mineral development’ has to be considered holistically and
not in an isolationist manner.
112. In this context, it is also necessary to point out that the
E National Mineral Policy 2008 provided that: “To maximise gains from
the comparative advantage which the country enjoys intra se mineral
development will be prioritised in terms of import substitution, value
addition and export, in that order.” Admittedly, iron ore is not extracted
33
(1996) 9 SCC 709
34
F “8. Periods for which mining leases may be granted or renewed.- (1) The maximum
period for which a mining lease may be granted shall not exceed thirty years:
Provided that the minimum period for which any such mining lease may be granted
shall not be less than twenty years.
(2) A mining lease may be renewed for a period not exceeding twenty years.
(3) Notwithstanding anything contained in sub-section (2), if the State Government is
G of opinion that in the interests of mineral development it is necessary so to do, it may,
for reasons to be recorded, authorise the renewal of a mining lease in respect of minerals
not specified in Part A and Part B of the First Schedule for a further period or periods
not exceeding twenty years in each case.
(4) Notwithstanding anything contained in sub-section (2) and sub-section (3), no
mining lease granted in respect of mineral specified in Part A or Part B of the First
H Schedule shall be renewed except with the previous approval of the Central Government.”
THE GOA FOUNDATION v. M/S SESA STERLITE LTD. & ORS. 427
[MADAN B. LOKUR, J.]

in Goa for import substitution, or value addition for domestic industry, but A
only for the last option, that is, export. Can it reasonably be said that the
export of iron ore is in the interest of mineral development? We were
informed that only one of the mining lease holders captively consumes
the extracted iron ore and it is evident from the Mineral Policy that
despite mining operations having closed down for some period in other
B
States, iron ore from Goa was not used in the domestic steel industry.
Therefore, it is not at all clear who, other than the mining lease holders
making exports, was benefited by resumption of mining operations in
Goa through a second renewal.
113. The Mineral Policy clearly suggests that for a period of five
years between 2006 and 2012 the mining lease holders committed various C
illegalities and irregularities in the mining process. This is an indication
of their exploitative and rapacious attitude having little or no concern for
the environment, the fragile ecology of Goa or even the health and well-
being of the average Goan. This irreparable damage was being caused
by the mining lease holders without any benefit to the domestic industry. D
Therefore, while the mining lease holders may have contributed virtually
nothing to the domestic industry, they might have made considerable
profits through exports and might have also benefited the foreign exchange
reserves of the country, but the real-time damage to the quality of health
and life of the average Goan and damage to the environment and ecology
of Goa is nevertheless incalculable or at least considerable – and export E
benefits cannot be weighed against health or the environment.
114. What is unfortunate about the entire commercial activity of
the mining lease holders is that there was no social or public purpose
attached to the mining operations. There was one and only one objective
behind the mining activity and that was profit maximization. The renewal F
of the mining leases would give considerable profits to the mining lease
holders well beyond the benefits that could accrue to the State or to the
average resident of Goa. It was observed by Justice Khehar in Natural
Resources Allocation that material resources of the country should not
be dissipated free of cost or at a consideration lower than their actual G
worth. This was not kept in mind and mining leases were renewed for a
small payment of stamp duty and royalty. It is therefore clear that the
considerations that weighed with the State were not for the people of
Goa but were for the mining lease holders. This certainly cannot be
described as being “in the interests of mineral development.”
H
428 SUPREME COURT REPORTS [2018] 2 S.C.R.

A 115. With the mining lease holders violating virtually every
applicable law or legal requirement, it is clear that the rule of law was
not their concern. The list of violations and their variety was documented
by the EAC and it makes for some very sad reading. To make matters
worse, it was clearly mentioned in the Grant of Mining Leases Policy
that a Special Investigating Team and a team of Chartered Accountants
B
would look into all the violations but the State chose not to wait for any
of the reports. There is no explanation for this.
116. In this background, there is little to suggest that the State
considered the requirements of Section 8(3) of the MMDR Act in that
the interests of mineral development was secondary while granting the
C second renewal of mining leases. The entire exercise undertaken by the
State was a hasty charade, regardless of violations of the law by the
mining lease holders, without any benefit to the Indian industry and without
any concern for the health of the average Goan.
117. The undue haste with which the State granted the second
D renewal of mining leases particularly after the amendments proposed to
the MMDR Act were placed in the public domain by the Government of
India (relating to the auction of mining leases) is a clear indication that
the decision of the State was not based on relevant material and not
necessarily triggered by the interests of mineral development. The very
E large number of renewals granted over a comparatively brief period is a
clear indication that the State did not have ‘mineral development’ in
mind but had some other non-statutory interests while taking its decision
to grant a second renewal to the mining leases. The haste with which
the State took its decision also needs to be understood in the background
of the fact that mining had been suspended by the State in September
F 2012 that is more than two years prior to the grant of second renewals.
The urgency suddenly exhibited by the State therefore seems to be make-
believe and motivated rather than genuine.
118. Facts from the record also disclose some interesting
information regarding the second renewal of mining leases. The table
G below indicates that except 13 mining leases, all the others were renewed
after publication of the draft Mines and Minerals (Development and
Regulation) Act, 2014 on 17th November, 2014. The table is given below
and is self explanatory:

H
THE GOA FOUNDATION v. M/S SESA STERLITE LTD. & ORS. 429
[MADAN B. LOKUR, J.]

Period Mining leases A
renewed
Between 5-17 November, 2014 13
Between 10 December, 2014 and 2 19
January, 2015
Between 5-12 January, 2015 56 B
Total 88
On 12 January, 2015 31
119. Of the 13 mining leases renewed in November 2014, it is
found that according to the State of Goa all of them are Category-I
violators (except Geetabala M.N. Parulekar who is a Category–II
C
violator). However, it was pointed out by learned counsel appearing on
behalf of Goa Foundation that the report of the Vishwanath Anand EAC
indicates that a recommendation was made to revoke the environmental
clearance in respect of 6 mining lease holders; additionally, none of the
mining lease holders had approval from the National Board for Wildlife
(where required); all of them (except 2) had mined in excess of the D
permissible limit under the environmental clearance; all of them had
indulged in dump mining; some of them were guilty of encroachments;
in almost every case the mining activity intersected ground water level
and none of the mining lease holders had permission for ground water
withdrawal. These cannot be described as minor violations but were
E
actually multiple violations in almost all cases. How could the State of
Goa and MoEF overlook these recommendations and multiple violations?
120. It may be recalled that the Mines and Minerals (Development
and Regulation) Amendment Ordinance, 2015 came into force on 12 th
January, 2015 and on that day as many as 31 mining leases were renewed.
F
In respect of 5 mining leases renewed in January, 2015 the report from
the Indian Bureau of Mines was called for in January, 2015 itself and the
mining leases were renewed without receipt of the report from the Indian
Bureau of Mines and before expiry of the mandatory period for submitting
the report in terms of the the second proviso to Rule 24A(3) of the
Mineral Concession Rules, 1960. In other words, without even receipt G
of any report from the Indian Bureau of Mines and even before the
expiry of the statutory waiting period, the State of Goa renewed some
mining leases. This is patently illegal.

H
430 SUPREME COURT REPORTS [2018] 2 S.C.R.

A 121. We were informed by the learned Additional Solicitor General
that of the 88 mining leases that were renewed, 38 of them are not
working for a variety of reasons – making their renewal an empty
exercise.
122. These facts are mentioned in the context of the undue haste
B shown by the State of Goa in granting a second renewal to the mining
leases keeping the following dates in mind:
17 th November, 2014 – The draft Mines and Minerals
(Development and Regulation) Act, 2014 was uploaded on the
website of the Ministry of Mines of the Government of India.
C 5th January, 2015 – Approval of the Mines and Minerals
(Development and Regulation) Amendment Ordinance, 2015 by
the Cabinet of the Government of India became public knowledge.
12th January, 2015 – President of India promulgated the Mines
and Minerals (Development and Regulation) Amendment
D Ordinance, 2015.
123. It is possible that the State did have some serious governance
issues to contend with as mentioned in the Grant of Mining Leases Policy,
namely, since iron ore mining had been suspended for more than two
years, the State faced a lack of funds resulting in its having difficulty in
E undertaking infrastructure projects and other activities. The State had
also to contend with the adverse effects faced by a large population that
was directly or indirectly dependent on the mining sector. Additionally,
the transport sector was affected as well as barges used for transport
through rivers from jetties. The stoppage of mining operations therefore
F affected several categories of stakeholders including small business or
small commercial ventures and workers/labour. The Grant of Mining
Leases Policy also noted that there was a tremendous loss of foreign
exchange of about $8 billion through exports and more than Rs. 850
crores towards loans/advances on the mining sector for a variety of
activities as well as about Rs. 1000 crores towards housing, business
G and other loans. Over all there was a slump in economic activity which
also had an impact on the education sector etc.
124. The State has projected virtual chaos (which could be an
exaggeration) but that is why we have left open the issue of arbitrariness
of the policy decision. Nevertheless the State is bound by the law, however
H uncomfortable it might be in granting a second renewal in terms of Section
THE GOA FOUNDATION v. M/S SESA STERLITE LTD. & ORS. 431
[MADAN B. LOKUR, J.]

8(3) of the MMDR Act. Therefore, on an overall consideration of all A
aspects of the case, we are of opinion that the decision of the State of
Goa to quickly renew the mining leases while ostensibly complying with
the requirements of Section 8(3) of the MMDR Act and thereby
jettisoning the rule of law was unjustified.
Whether fresh environmental clearances were required to be B
obtained by the mining lease holders?
125. The question whether the mining lease holders required fresh
environmental clearances arises in the context of paragraph 82 of the
decision rendered in Goa Foundation quoted above. It must be stated
that some mining lease holders had environmental clearances under EIA C
1994 while others under EIA 2006. Notwithstanding this, since we have
held that fresh mining leases were required to be granted, it follows that
fresh environmental clearance is required to be obtained by those who
are granted a fresh mining lease.
126. That apart, the materials before the Court while deciding Goa D
Foundation included the report of the Justice Shah Commission, the
report of the EAC and the report of the Expert Committee constituted
by the Court by orders dated 11th November, 2013 and 18th November,
2013. On a combined reading of the material before it, the Court took a
broad view that large-scale mining of iron ore led to several adverse
impacts including those related to the environment, ecology and health E
of the people of Goa and that these illegalities and irregularities were
committed by almost all (if not all) mining lease holders as reported by
the EAC. The Court also accepted the view of the Expert Committee
that the ecology of Goa was being degraded through indiscriminate mining
and placed a cap on the annual excavation of iron ore. It was noted that F
mining by the lessees in Goa after 22nd November, 2007 was illegal and
that mining operations were suspended by the State of Goa on 10 th
September, 2012 and environmental clearances granted to the mines
were kept in abeyance by the MoEF on 14th September, 2012. Considering
all this, as well as the law laid down in Goa Foundation to the effect
that there is no automatic second renewal of a mining lease but that a G
second renewal must be granted in accordance with the provisions of
Section 8(3) of the MMDR Act, the Court used the expression “grant
fresh environmental clearances for mining projects” in the passage
referred to above.
H
432 SUPREME COURT REPORTS [2018] 2 S.C.R.

A 127. We have already adverted to the report of the EAC. As far
as the Expert Committee set up by the Court is concerned, it had furnished
an Interim Report dated 14th March, 2014 in which it noted large-scale
degradation of the environment and recommended placing an annual
cap between 20 and 27.5 million tonnes on the extraction of iron ore in
Goa. The Expert Committee noted the following (which makes for some
B
very depressing reading):
“The production of iron ore has jumped from 14.6 million tons in
1941 to 41.17 million tons in 2010-2011. In 1980s the production
was about 10 MT/annum. The quantum jump in iron ore
production in Goa was essentially due to steep rise in
C exports of fines and other low grade ore of 42% Fe content
to China. This has led to massive negative impacts on all
ecosystems leading to enhanced air, water, and soil
pollution affecting quality of life across Goa. This is evident
by three important reports i.e. (i) Areawise Environmental Quality
D Management (AEQM) Plan for the Mining belt of Goa by Tata
Energy Research Institute, New Delhi and Goa (1997) and it
was submitted to the Directorate of Planning, Statistics, and
Evaluation, Government of Goa, (ii) Environmental and Social
Performance Indicators and Sustainability Markers in Minerals
Development Reporting Progress towards Improved Ecosystem
E Health and Human Well-being, Phase III by TERI and
International Development Research Centre, Ottawa, Canada
(2006) and (iii) the Regional Environmental Impact Study of
Iron Ore Mining in Goa region sponsored by MoEF, New Delhi
(2014) by Indian School of Mines. Besides the above three main
F reports, a number of scientific research papers on the impact of
iron ore mining on the environment and ecology of diverse
ecosystems were published by scientists working at Goa
University and NIO.
These reports and publications substantiate that the
G mining, particularly the enhanced level of annual
production contributed to adverse impacts on the
ecological systems, socio-economics of Goa and health of
people of Goa leading to loss of ecological integrity. This is
due to enhanced levels of pollutants, particularly RSPM and SPM,
sedimentation of materials from dumps and iron ore in rivers,
H
THE GOA FOUNDATION v. M/S SESA STERLITE LTD. & ORS. 433
[MADAN B. LOKUR, J.]

estuaries and shallow depth (20 m) of sea water, agricultural A
fields, high concentration of Fe and Mn in surface waters and
their bioaccumulation.” [Emphasis supplied by us].
128. Faced with this material evidence before it, the Court took
the view in Goa Foundation that fresh environmental clearances must
be obtained. Unfortunately however, the State of Goa was more B
concerned with earning revenue rather than the health of the people of
Goa or enforcing the rule of law and therefore gave a complete go-bye
to the directions of this Court and to the concerns of the citizens of Goa
and requested the MoEF to lift the abeyance on the environmental
clearances.
C
129. Acting on the request made by the State of Goa by letters
dated 7th January, 2015 and 5th February, 2015, the MoEF passed three
orders on 20th March, 2015. We have already adverted to the contents
of the orders passed on 20th March, 2015.
130. The first order of 20 th March, 2015 is essentially a D
communication documenting the variety of illegalities and irregularities
committed by the mining lease holders and that the Government of India
would be referring the cases for appropriate action and also requesting
the Principal Secretary, Environment in the Government of Goa to take
necessary action.
E
131. The second order of 20 th March, 2015 is an Office
Memorandum to the effect that a project proponent will not be required
to obtain a fresh environmental clearance at the time of renewal of the
mining lease. This is misleading information and contrary to the decision
of this Court in M.C. Mehta v. Union of India35 as well as the decision
rendered in Common Cause v. Union of India.36 F
132. It was held in Ambica Quarry Works v. State of Gujarat37,
Rural Litigation and Entitlement Kendra v. State of U.P.38 and State
of M.P. v. Krishnadas Tikaram 39 (which decisions were followed in
M.C. Mehta) that the renewal of a lease, whether under the provisions
of the Forest (Conservation) Act, 1980 or otherwise cannot be granted G
without the lease holder complying with the necessary statutory
35
(2004)12 SCC 118
36
(2017) 9 SCC 499
37
(1987) 1 SCC 213
38
1989 Supp (1) SCC 504
39
1995 Supp (1) SCC 587 H
434 SUPREME COURT REPORTS [2018] 2 S.C.R.

A requirements particularly since the grant of renewal is a fresh grant and
must be consistent with law. The principle of compliance with statutory
provisions at the stage of renewal of a lease was re-affirmed in Common
Cause in paragraphs 105 and 106 of the Report. In paragraph 188(2) of
the Report it was categorically held as follows:
B “(2) The renewal of a mining lease after 27-1-1994 will require
an EC even if there is no expansion or modernisation activity or
any increase in the pollution load.”
133. The third order of 20th March, 2015 is extremely cryptic in
the matter of lifting the abeyance order of 14th September, 2012 on
C environmental clearances. While dealing with 35 mining leases for which
environmental clearance had been granted under EIA 1994 and 37 mining
leases for which environmental clearance had been granted under EIA
2006, the following is stated:
“It has been decided in the Ministry that the EC issued under
D 1994 notification in case they are valid and subsisting would not
require fresh EC at the time of renewal (O.M. L-11011/15/
2012-IA-II (M) dated 20.3.2015. Therefore it has been decided
to lift abeyance on the 72 cases of which 35 cases had been
granted EC under the provisions of EIA notification 1994 and 37
cases had been granted EC under EIA notification 2006.”
E [Emphasis supplied by us].
134. As mentioned above and as held in M.C. Mehta and Common
Cause, the renewal of a lease after 27th January, 1994 would require an
environmental clearance. Therefore, a mining lease holder having a valid
environmental clearance obtained under EIA 1994 would still require a
F fresh environmental clearance for renewal of the mining lease in 2014-
2015 as the case may be. That being so there is no doubt at all that the
35 cases referred to in the third order of 20th March, 2015 who had an
environmental clearance under EIA 1994 did require a fresh environmental
clearance at the time of renewal of the mining lease. Since they did not
G have such a fresh environmental clearance the renewal of these 35
mining leases is clearly bad in law. Moreover, as held in M.C. Mehta
and Common Cause the validity of an environmental clearance granted
under EIA 1994 is only for five years. Therefore all environmental
clearances granted under EIA 1994 had lost their validity before 2015,
EIA 1994 having been replaced by EIA 2006.
H
THE GOA FOUNDATION v. M/S SESA STERLITE LTD. & ORS. 435
[MADAN B. LOKUR, J.]

135. As regards the 37 mining leases that had obtained A
environmental clearance under EIA 2006, since the validity of the
environmental clearance is for the estimated project life or a maximum
of 30 years in terms of paragraph 9 of EIA 2006 therefore no violation
can be found on the ground of validity for the time period. To this limited
extent, no interference is necessary at this stage in respect of these 37
B
mining leases. We make it clear, however, that this is subject to our
conclusion that fresh mining leases were required to be granted by the
State of Goa. Consequently, a mining lease holder obtaining a fresh mining
lease would require a fresh environmental clearance in terms of EIA
2006.
136. What is disturbing is that notwithstanding several and various C
violations, the MoEF granted environmental clearance to 72 mining leases.
It seems to us that the MoEF acted without any application of mind in
lifting the order placing all the environmental clearances in abeyance.
Since the entire exercise carried out by the MoEF on 20th March, 2015
was mechanical, at the behest of the State of Goa, without due application D
of mind, without considering the multiple illegalities and irregularities
committed by the mining lease holders or passing on the buck to the
State of Goa and without considering relevant material such as the report
of the EAC and the Expert Committee appointed by this Court, the
exercise of lifting the abeyance order on 20th March, 2015 by the MoEF
must be held void and as directed by the Court in Goa Foundation all E
the mining lease holders must obtain fresh environmental clearance for
their mining project.
137. We were informed by the learned Additional Solicitor General
that show cause notices have now been issued to some mining lease
holders demanding huge amounts - some running into hundreds of crores F
of rupees towards value of ore extracted in excess of the environmental
clearance. We were handed over some sample show cause notices
(about 12) issued in September and October 2017 and the figures are
quite staggering – the demand raised being about Rs. 1500 crores!
Similarly, from the Summary of Mining Audit Report submitted by the G
auditors (and handed over to us by the learned Additional Solicitor
General – for the period July 2016 to December 2016) the amount
demanded (including interest) by the State of Goa from the mining lease
holders through show cause notices issued is about Rs. 1500 crores!
And without making any serious attempt to recover such huge amounts,
H
436 SUPREME COURT REPORTS [2018] 2 S.C.R.

A the State of Goa has granted second renewal of mining leases and the
MoEF played ball by lifting the abeyance order in respect of the
environment clearances. The inferences that can be drawn are quite obvious.
138. We must emphasise that issues impacting society are required
to be looked at holistically and not in a disaggregated manner. An overall
B perspective is necessary on such issues including issues that impact on
the environment and the people of a community or a region or the State.
It is for this reason that it is necessary to look at them broadly otherwise
if that broader perspective is lost everyone will be a loser and no one will
be a real beneficiary. One or two violations here and there may be wished
away as inconsequential, but multiple violations by several persons can
C result in serious problems. As the novelist and philosopher Ayn Rand
had said: We can evade reality, but we cannot evade the consequences
of evading reality. Therefore, there is no doubt that the Mineral Policy,
the Grant of Mining Leases Policy, the amendment to the MMDR Act,
the report of the EAC and the report of the Expert Committee must be
D considered in the larger context of constitutionalism, the rule of law,
environmental jurisprudence as well as the fundamental right of the people
of Goa to have clean air and protection of the fragile ecology. Governance
cannot and should not be carried out de hors the interests of the people
and some uncomfortable decisions may be inevitable for balancing the
equities.
E
139. Finally, a controversy (wholly unnecessary in our view) was
raised with regard to the period of validity of the environmental clearance
granted under EIA 1994. Firstly, in the view that we have taken, the
validity period of an environmental clearance under EIA 1994 is academic
since a fresh environmental clearance was necessary at the time of
F renewal of a lease. Secondly, the period of validity of an environmental
clearance was considered in M.C. Mehta and it was clearly held that it
is valid for 5 years only. In paragraph 77 of the Report it was observed:
“We are unable to accept the contention that the notification
dated 27-1-1994 would not apply to leases which come up for
G consideration for renewal after issue of the notification. The
notification mandates that the mining operation shall not be
undertaken in any part of India unless environmental clearance
by the Central Government has been accorded. The clearance
under the notification is valid for a period of five years. In
none of the leases the requirements of the notification were
H
THE GOA FOUNDATION v. M/S SESA STERLITE LTD. & ORS. 437
[MADAN B. LOKUR, J.]

complied with either at the stage of initial grant of the mining A
lease or at the stage of renewal. Some of the leases were fresh
leases granted after issue of the notification. Some were cases
of renewal. No mining operation can commence without obtaining
environmental impact assessment in terms of the notification.”
[Emphasis supplied by us].
B
A similar view was expressed in paragraph 87 in Common Cause. Any
contrary view expressed in any notification issued by MoEF (including
the notification of 15th January, 2016) cannot overrule decisions of this
Court and is void to the extent that it does so.
140. It was submitted that all relevant notifications on the subject C
had not been placed before the Court and hence an erroneous conclusion
was arrived at with respect to EIA 1994. We propose to deal with the
notifications placed before us.
141. The notification of 27th January, 1994 (EIA 1994) deals with
site clearance in paragraph 2.II(d). This provides, inter alia, that site D
clearance will be granted for a mining operation by the Central
Government and that site clearance will be valid for a period of five
years for commencing the operation or mining. Paragraphs 2.III(a) and
2.III(c) of the notification deal with the procedure for obtaining
environmental clearance, but do not provide for the validity period of the
environmental clearance. E
142. A notification of 4th May, 1994 refers to the notification of
th
27 January, 1994 and substitutes paragraph 2.III(c) therein and provides
that the environmental clearance “shall be valid for a period of five years
from commencement of the construction or operation.” What this
provides, therefore, is that if environmental clearance is granted on a F
particular date and the mining operation starts on a later date, then the
validity of the environmental clearance commences from the later date
and is valid for five years from that date. This was reiterated in the
notification of 10th April, 1997.
143. The validity of an environmental clearance is specifically G
provided for in EIA 2006 in paragraph 9 thereof. As far as we are
concerned, it provides that in respect of mining operations, the
environmental clearance would be valid for the “project life as estimated
by Expert Appraisal Committee or State Level Expert Appraisal
Committee subject to a maximum of thirty years for mining projects….”.
H
438 SUPREME COURT REPORTS [2018] 2 S.C.R.

A 144. For no apparent reason and after EIA 2006, the issue of the
validity of an environmental clearance granted under EIA 1994 was
raked up and a notification was issued by the MoEF on 21st August,
2013 in which it was noted that the notification of 4th May, 1994 provided
that “the clearance granted shall be valid for a period of five years from
commencement of the construction or operation”. Another notification
B
of 21st August, 2013 goes on to say that the intent of the Central
Government has been and has always been that the validity of the
environmental clearance is for five years “for” commencement of the
construction or operation and not that the environment clearance is only
for five years “from” the commencement of construction or operation.
C Therefore, the Central Government clarified in the notification of 21st
August, 2013 that the expression “for a period of five years” shall mean
“for a period of five years for commencement of the construction or
operation and not five years from commencement of the construction or
operation.” We do not see how this controversy really arises or its
relevance to the present case, but we refer to it since submissions were
D
made to explain the distinction between “for” five years and “from” five
years in respect of the validity of an environmental clearance.
145. It is perhaps sought to be contended that if environmental
clearance is granted and mining operations commence within the five
year period, then the environmental clearance under EIA 1994 is valid
E till the project or the mining lease period is over. We cannot see how
such an inference can be drawn. Moreover, this submission overlooks
the decisions in M.C. Mehta and Common Cause which accept the
view that the validity of an environmental clearance granted under EIA
1994 is only five years as also the view that a valid environmental
F clearance is necessary for the renewal of a mining lease. No notification
of the MoEF can overrule decisions of this Court. As far as EIA 2006 is
concerned this submission is academic and not relevant since paragraph
9 of EIA 2006 provides that the environmental clearance would be valid
for the estimated project life subject to a maximum of 30 years.
G 146. Learned counsel for the mining lease holders also relied upon
a decision of the Delhi High Court in S. N. Mohanty v. Union of India40
to contend that notwithstanding a notification issued by MoEF on 4th
April, 2011 it was not obligatory for a mining lease holder to obtain a
fresh environmental clearance at the time of renewal of a lease, if the
40
H 2012 SCC OnLine Del 4000
THE GOA FOUNDATION v. M/S SESA STERLITE LTD. & ORS. 439
[MADAN B. LOKUR, J.]

environmental clearance was subsisting. In that case, the petitioner had A
an environmental clearance obtained under EIA 2006 on 15th January,
2007 and the first renewal of the mining lease was due on 2nd April,
2012. In that context, it was submitted that it was not necessary for the
petitioner to obtain environmental clearance for renewal of the mining
lease. The Delhi High Court took the view that: “… if a person has a
B
valid and subsisting EC [environmental clearance] at the point of time
he seeks a renewal of the mining lease, he would still be required to
obtain another EC prior to the grant of renewal by the respondents.
That, in our view, is not the intent and purport of the Supreme Court
directions in M.C. Mehta.” This question does not arise in the context
of EIA 1994. C
147. One final submission before us was that these cases be
referred to a Bench of 9 learned judges since the constitutional validity
of the Goa, Daman & Diu Mining Concessions (Abolition & Declaration
of Mining Leases) Act, 1987 was under challenge in some cases and the
decision in those cases would perhaps render the present proceedings D
infructuous. In some of these pending cases, this Court had passed an
order on 29th October, 2002 to await the decision of 9 learned judges in
Property Owners’ Association v. State of Maharashtra.41 We are not
at all inclined to accept this request and mention it only to reject it.
Correctness of the decision of the High Court in Lithoferro E
148. As far as the SLPs are concerned (SLP (C) No. 32138 of
2015 and SLP (C) Nos. 32699-32727 of 2015) we set aside the judgment
and order dated 13th August, 2014 of the High Court in view of our
conclusion that the State of Goa was required to grant fresh licences in
terms of the decision of this Court in Goa Foundation. The High Court F
proceeded on the erroneous basis that it could direct the State of Goa to
grant a second renewal of the mining leases notwithstanding the direction
in Goa Foundation.
Conclusions and directions
149. In view of our discussion, we arrive at the following G
conclusions:
1. As a result of the decision, declaration and directions of this
Court in Goa Foundation, the State of Goa was obliged to grant

41
(2013) 7 SCC 522 dated 20th February, 2002 H
440 SUPREME COURT REPORTS [2018] 2 S.C.R.

A fresh mining leases in accordance with law and not second
renewals to the mining lease holders.
2. The State of Goa was not under any constitutional obligation to
grant fresh mining leases through the process of competitive
bidding or auction.
B 3. The second renewal of the mining leases granted by the State of
Goa was unduly hasty, without taking all relevant material into
consideration and ignoring available relevant material and
therefore not in the interests of mineral development. The decision
was taken only to augment the revenues of the State which is
C outside the purview of Section 8(3) of the MMDR Act. The
second renewal of the mining leases granted by the State of Goa
is liable to be set aside and is quashed.
4. The Ministry of Environment and Forest was obliged to grant
fresh environmental clearances in respect of fresh grant of mining
D leases in accordance with law and the decision of this Court in
Goa Foundation and not merely lift the abeyance order of 14th
September, 2012.
5. The decision of the Bombay High Court in Lithoferro v. State
of Goa (and batch) giving directions different from those given
E by this Court in Goa Foundation is set aside.
6. The mining lease holders who have been granted the second
renewal in violation of the decision and directions of this Court in
Goa Foundation are given time to manage their affairs and
may continue their mining operations till 15th March, 2018.
F However, they are directed to stop all mining operations with
effect from 16th March, 2018 until fresh mining leases (not fresh
renewals or other renewals) are granted and fresh environmental
clearances are granted.
7. The State of Goa should take all necessary steps to grant fresh
mining leases in accordance with the provisions of the Mines
G
and Minerals (Development and Regulation) Act, 1957. The
Ministry of Environment and Forest should also take all necessary
steps to grant fresh environmental clearances to those who are
successful in obtaining fresh mining leases. The exercise should
be completed by the State of Goa and the Ministry of
H Environment and Forest as early as reasonably practicable.
THE GOA FOUNDATION v. M/S SESA STERLITE LTD. & ORS. 441
[MADAN B. LOKUR, J.]

8. The State of Goa will take all necessary steps to ensure that the A
Special Investigation Team and the team of Chartered
Accountants constituted pursuant to the Goa Grant of Mining
Leases Policy 2014 give their report at the earliest and the State
of Goa should implement the reports at the earliest, unless there
are very good reasons for rejecting them.
B
9. The State of Goa will take all necessary steps to expedite recovery
of the amounts said to be due from the mining lease holders
pursuant to the show cause notices issued to them and pursuant
to other reports available with the State of Goa including the
report of Special Investigation Team and the team of Chartered
Accountants. C

150. The writ petitions and SLPs are disposed of in accordance
with the above conclusions and directions.

Kalpana K. Tripathy Petitions disposed of. D

E

F

G

H